Pitney Bowes Inc. (NYSE:PBI), a global technology company that
provides products and solutions that power commerce, today reported
financial results for the second quarter 2015.
Quarterly Financial Results:
- Revenue of $881 million, a decline of 4
percent on a constant currency basis and a decline of 8 percent as
reported. Revenue declined 3 percent versus the prior year when
adjusted for the impacts of currency and the divestiture of certain
European revenue streams in the prior year.
- Adjusted EPS of $0.45; GAAP EPS of
$0.75. Adjusted EPS includes a $0.02 negative impact for currency
translation during the quarter.
- Free cash flow of $84 million; GAAP
cash from operations of $96 million.
- Established new segment reporting.
- Increasing annual GAAP EPS guidance as
a result of the net gain on the sale of Imagitas; partially offset
by costs associated with the Borderfree acquisition; restructuring
and asset impairment charges; and other expenses.
- Updating revenue guidance to reflect
results year-to-date.
- Updating annual adjusted EPS and free
cash flow guidance solely to reflect the impacts of the Borderfree
acquisition and Imagitas sale.
Transactions Completed During the Quarter
- Acquisition of Borderfree for
approximately $400 million, inclusive of transaction fees and net
of cash on Borderfree’s balance sheet.
- Sale of the Marketing Services
business, Imagitas, which will generate net proceeds of
approximately $270 million, net of transaction fees, cash on their
balance sheet and taxes when paid.
- Sale of former World Headquarters
building for $39 million.
“We are at an inflection point in our transformation where the
cumulative effects of the steps we have taken over the past 30
months position us for long-term growth and profitability,” said
Marc B. Lautenbach, President and CEO of Pitney Bowes. “While we
continued to make progress on our way to transform Pitney Bowes,
our second quarter financial results were mixed. Our Presort
Services business performed well and our North American Small and
Medium Business continued to improve. However, growth in our
Ecommerce business was negatively affected by the strong dollar and
our performance in Europe was below our expectations.
“That said, the actions we have taken over the last two years
have strengthened our hand and improved our competitive position.
As a result, we are poised for sustained improvement in the second
half and beyond. For this reason, we will begin executing our
authorized share repurchase program with the intent to complete the
program by the end of this year.”
SECOND QUARTER 2015 – REVENUE RESULTS
Revenue totaled $881 million, a decline of 4 percent on a
constant currency basis and 8 percent on a reported basis versus
the prior year. For comparative purposes, revenue would have
declined 3 percent compared to the prior year when the current and
prior periods are adjusted for the impacts of currency and the
reduction in revenue resulting from the exit of direct operations
in some European countries that we completed in the third quarter
of 2014.
Digital Commerce Solutions revenue, which excludes marketing
services from both periods, grew 4 percent on a constant currency
basis and was flat to prior year on a reported basis. Revenue on a
constant currency basis benefited from growth in ecommerce and
shipping solutions, which was offset by a decline in software
solutions.
Enterprise Business Solutions revenue declined 2 percent on a
constant currency basis and 5 percent on a reported basis. Revenue
benefited from continued growth in Presort Services while revenue
in Production Mail declined.
Small and Medium Business (SMB) Solutions revenue declined 6
percent on a constant currency basis and 11 percent on a reported
basis. For comparative purposes, revenue would have declined 4
percent when adjusted for the impacts of currency and the divested
revenues in Europe from the prior year.
Other revenue, which was primarily attributable to marketing
services, declined 26 percent when compared to the prior year. The
decline is a result of only two months of reported revenue this
quarter due to the sale of this business completed in May versus a
full quarter of revenue in the prior year.
SECOND QUARTER 2015 - EPS RESULTS
On a Generally Accepted Accounting Principles (GAAP) basis,
earnings per diluted share were $0.75. Adjusted earnings per
diluted share were $0.45 and exclude:
- $0.44 per share of Other income due to
the net gain from the sale of Imagitas;
- $0.05 per share of Other expense for
the resolution in principle of an outstanding legal matter and
transaction costs and fees related to the Borderfree and Imagitas
transactions;
- $0.04 per share of compensation expense
related to the vesting of options associated with the Borderfree
acquisition; and
- $0.04 per share for Restructuring and
asset impairment charges.
The Company achieved its earnings per share despite the
inclusion of $0.03 in reductions related to currency translation,
loss of one month of Imagitas earnings and one month of
amortization of intangibles related to Borderfree. The Company
continued to reduce SG&A versus the prior year despite on-going
investments in the business.
The Company’s earnings per share results for the quarter are
summarized in the table below:
Second Quarter *
2015
2014
Adjusted EPS from continuing operations $ 0.45
$ 0.46 Other income $ 0.44 - Other expense ($0.05 ) -
SG&A - compensation expense ($0.04 ) - Restructuring and asset
impairments ($0.04 )
($0.03 )
GAAP EPS from continuing operations $
0.75 $ 0.43 Discontinued operations
- $ 0.03
GAAP EPS
$ 0.75 $ 0.46
* The sum of the earnings per share may not equal the totals
above due to rounding
SECOND QUARTER 2015 - FREE CASH FLOW RESULTS
Free cash flow during the quarter was $84 million and $96
million on a GAAP basis. In comparison to the prior year, second
quarter free cash flow was lower primarily due to the timing of
working capital requirements; lower Reserve Account deposits and
less of a decline in finance receivables as a result of a
stabilizing portfolio. During the quarter, the Company used cash to
pay $47 million in dividends to its shareholders, made $9 million
in restructuring payments and received $39 million of cash related
to the sale of our former World Headquarters building.
BUSINESS SEGMENT REPORTING
The Company has revised its business segment reporting for its
Digital Commerce Solutions segment. The Company’s business segment
reporting reflects the clients served in each market and the way it
manages these segments for growth and profitability. The reporting
segment groups are the SMB Solutions group; the Enterprise Business
Solutions group; the Digital Commerce Solutions group; and the
Other segment.
The SMB Solutions group offers mailing equipment, financing,
services and supplies for small and medium businesses to
efficiently create mail and evidence postage. This group includes
the North America Mailing and International Mailing segments. North
America Mailing includes the operations of U.S. and Canada Mailing.
International Mailing includes all other SMB operations around the
world.
The Enterprise Business Solutions group provides mailing and
printing equipment and services for large enterprise clients to
process mail, including sortation services to qualify large mail
volumes for postal worksharing discounts. This group includes the
global Production Mail and Presort Services segments.
The Digital Commerce Solutions group provides customer
engagement, customer information and location intelligence
software; and solutions that facilitate global cross-border
ecommerce transactions and shipping solutions for businesses of all
sizes. This group includes the Software Solutions and Global
Ecommerce segments.
The Other segment includes marketing services, which was sold on
May 29, 2015.
SMB Solutions Group
($ millions) Second Quarter
Y/Y Ex Currency Y/Y Y/Y and
Divested
Revenue
2015
2014
Reported
Ex
Currency
Revenues*
North America Mailing $ 357 $ 371 (4 %) (3 %) (3 %)
International Mailing
111
153
(28
%)
(15
%)
(8
%)
SMB Solutions Total $ 467 $ 524
(11 %) (6 %) (4 %)
EBIT North America Mailing $ 159 $ 157 2 % International
Mailing
14
26
(47
%)
SMB Solutions Total $ 174 $ 183
(5 %)
* Excludes the impacts of currency and the
divested revenues in Europe related to the exit of a non-core
product line in Norway and transition to a dealer sales network in
six smaller European markets completed in the third quarter of
2014.
North America Mailing
The decline in revenue for the quarter was the lowest rate of
decline in five quarters, reflecting a continuation of the
stabilization in results. Equipment sales declined at a low-single
digit rate as the disruption from the change in go-to-market
subsides and the sales organization becomes more productive.
Recurring revenue stream trends were in-line with prior quarters.
EBIT margin improved versus the prior year due to the mix of
business, organizational streamlining and on-going cost reduction
initiatives.
International Mailing
During the quarter, currency adversely affected the decline in
revenue by 13 percentage points. For comparative purposes, revenue
would have declined 8 percent when adjusted for the impacts of
currency and the reduction in revenue resulting from the exit of
direct operations in some European countries completed in the third
quarter of 2014.
Results continued to be impacted by the implementation of the
go-to-market initiative. All major markets, except France, have
completed the go-to-market resource shift and are focused on
improving productivity. France has completed its consultation phase
and is expected to complete its go-to-market transition in the
third quarter. Revenue comparison was also adversely impacted by
the timing of postal rate changes in a number of countries.
EBIT margin declined versus the prior year primarily due to
lower mail finishing equipment sales, the impact of currency on
some supply chain costs and the timing of postal rate changes.
Enterprise Business Solutions
Group
($ millions) Second Quarter
Y/Y Ex Currency Y/Y Y/Y and
Divested
Revenue 2015 2014 Reported Ex Currency Revenues*
Production Mail $ 98 $ 112 (13 %) (7 %) (6 %) Presort Services
114
111
2
%
2
%
2
%
Enterprise Business Total $ 212 $
223 (5 %) (2 %) (2
%) EBIT Production Mail $ 10 $ 11 (5 %)
Presort Services
24
22
5
%
Enterprise Business Total $ 34 $
33 2 %
* Excluding the impacts of currency and the
divested revenues in Europe related to the transition to a dealer
sales network in six smaller European markets completed in the
third quarter of 2014.
Production Mail
Revenue declined during the quarter due to lower support
services revenue and fewer equipment sales in Europe and Asia. U.S.
equipment sales grew as a result of an increase in the number of
inserting equipment installations. EBIT margin improved versus the
prior year due to a favorable geographic mix and higher-margin
equipment sales, as well as on-going cost reduction
initiatives.
Presort Services
Revenue benefited from higher volume of First Class mail
processed versus the prior year. EBIT margin improved versus the
prior year due to the revenue growth and on-going operational
productivity.
Digital Commerce Solutions
Group
($ millions) Second Quarter
Y/Y Y/Y
Revenue 2015 2014 Reported Ex
Currency Software Solutions $ 99 $ 109 (9 %) (4 %) Global Ecommerce
78
69
14
%
15
%
Digital Commerce Total $ 177 $
177 0 % 4 % EBIT
Software Solutions $ 16 $ 10 64 % Global Ecommerce
3
4
(19
%)
Digital Commerce Total $ 19 $ 14
41 %
Software Solutions
Revenue was impacted by lower licensing and services sales in
Europe and Asia Pacific, which offset growth in licensing revenue
in the Americas. However, as a result of go-to-market initiatives
and new product introductions, the business is signing on a larger
number of quality, mid-sized deals, which will reduce dependency on
one-time large deals and drive new client acquisition. EBIT margin
improved as a result of greater channel efficiency and consistency,
as well as focused cost reduction initiatives to streamline the
operations.
Global Ecommerce
Revenue includes the Borderfree acquisition late in the quarter
and expansion of the eBay UK outbound cross-border service.
However, outbound package shipments from the U.S. continued to be
pressured by the strong U.S. dollar. Shipping solutions revenue
strengthened as a result of additional new clients. The shipping
business is also benefiting directly from improvements in the SMB
channel that markets its solutions to mid-sized companies.
EBIT margin was impacted by on-going operational costs and
integration investments related to the Borderfree acquisition as
well as continued investment in the Company’s cross-border
platforms.
Other
($ millions) Second Quarter
Y/Y Y/Y
2015
2014
Reported
Ex
Currency
Revenue $ 25 $ 33 (26
%) (26 %) EBIT $ 6
$ 4 30 %
As a result of the sale of the marketing services business in
May, the Company recognized only two months of reported revenue
this quarter versus a full quarter of revenue in the prior
year.
2015 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.
The Company expects trends in the business to improve in the
second half of the year versus the first half of the year as a
result of recent actions taken to position the portfolio for
growth, including go-to-market improvements, new product launches,
client wins and partnerships.
Based on year-to-date results and the Company’s expectation of
constant currency revenue growth of 1 percent to 5 percent in the
second half of the year, the Company is adjusting its annual
revenue guidance. The Company now expects revenue to be in the
range of a 1 percent decline to 1 percent growth when compared to
2014 on a constant currency basis.
The Company is increasing its annual GAAP EPS guidance to be in
the range of $2.06 to $2.21. This guidance includes the
following:
- $0.44 per share of Other income related
to the net gain from the sale of Imagitas;
- $0.05 per share of Other expense for
the resolution in principle of an outstanding legal matter and
transaction costs and fees related to the Borderfree and Imagitas
transactions;
- $0.04 per share of Restructuring and
asset impairment charges;
- $0.04 per share of compensation expense
related to the vesting of options associated with the Borderfree
acquisition;
- $0.06 per share of reduced earnings as
a result of the sale of Imagitas; and
- $0.04 per share of reduced earnings
related to Borderfree, which includes principally amortization of
intangibles and integration investments net of early savings from
expected synergies.
The Company is updating its adjusted EPS and free cash flow
guidance solely to reflect the impacts of the Borderfree
acquisition and Imagitas sale.
- Adjusted EPS is now expected to be in
the range of $1.75 to $1.90.
- Free cash flow is now expected to be in
the range of $450 million to $525 million.
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.
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. ET. 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. 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 and six months ended June 30, 2015 and 2014, and
consolidated balance sheets at June 30, 2015 and December 31, 2014
are attached.
Pitney
Bowes Inc. Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except share and per share data)
Three months ended June 30, Six months ended June 30, 2015
2014 2015 2014 Revenue: Equipment sales $
165,507 $ 191,518 $ 331,471 $ 380,574 Supplies 70,636 76,284
144,004 155,801 Software 99,184 109,065 185,541 200,620 Rentals
111,312 122,443 225,309 246,022 Financing 101,437 107,644 207,067
217,694 Support services 139,237 158,190 278,795 316,442 Business
services 193,578 193,306 399,385
378,794 Total revenue 880,891
958,450 1,771,572 1,895,947 Costs and
expenses: Cost of equipment sales 79,043 88,818 154,056 171,352
Cost of supplies 21,624 23,505 44,283 47,659 Cost of software
28,501 33,484 58,365 63,648 Cost of rentals 21,003 25,193 41,704
50,637 Financing interest expense 17,868 20,413 36,638 40,066 Cost
of support services 81,507 96,722 165,106 195,703 Cost of business
services 135,636 135,024 275,555 263,960 Selling, general and
administrative 315,578 338,384 630,107 689,759 Research and
development 28,492 28,649 54,540 54,841 Restructuring charges and
asset impairments, net 14,350 8,299 14,269 18,140 Interest expense,
net 20,971 21,482 45,035 45,546 Other (income) expense, net
(93,135 ) - (93,135 ) 61,657 Total
costs and expenses 671,438 819,973
1,426,523 1,702,968 Income from continuing
operations before income taxes 209,453 138,477 345,049 192,979
Provision for income taxes 52,351
46,335 102,898 54,371 Income from
continuing operations 157,102 92,142 242,151 138,608 (Loss)
Income from discontinued operations, net of tax (739 )
6,717 (582 ) 9,518 Net income before
attribution of noncontrolling interests 156,363 98,859 241,569
148,126
Less: Preferred stock dividends of
subsidiaries attributable to noncontrolling interests
4,593 4,594 9,187 9,188
Net income - Pitney Bowes Inc. $ 151,770 $ 94,265 $
232,382 $ 138,938 Amounts attributable to
common stockholders: Income from continuing operations $ 152,509 $
87,548 $ 232,964 $ 129,420 (Loss) Income from discontinued
operations, net of tax (739 ) 6,717 (582 )
9,518 Net income - Pitney Bowes Inc. $ 151,770
$ 94,265 $ 232,382 $ 138,938 Basic earnings per share
attributable to common stockholders (1): Continuing operations $
0.76 $ 0.43 $ 1.16 $ 0.64 Discontinued operations -
0.03 - 0.05 Net income - Pitney
Bowes Inc. $ 0.75 $ 0.47 $ 1.15 $ 0.69 Diluted
earnings per share attributable to common stockholders (1):
Continuing operations $ 0.75 $ 0.43 $ 1.15 $ 0.63 Discontinued
operations - 0.03 - 0.05
Net income - Pitney Bowes Inc. $ 0.75 $ 0.46 $ 1.15
$ 0.68 Weighted-average shares used in diluted EPS
202,839,944 204,470,220 202,634,107
204,101,162
(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
June 30,
2015
December 31,
2014
Current assets: Cash and cash equivalents $ 754,171 $ 1,079,145
Short-term investments 46,256 32,121 Accounts receivable,
gross 411,492 448,017 Allowance for doubtful accounts receivable
(11,448 ) (10,742 ) Accounts receivable, net 400,044
437,275 Short-term finance receivables 969,398 1,019,412
Allowance for credit losses (16,508 ) (19,108 )
Short-term finance receivables, net 952,890 1,000,304
Inventories 101,072 84,827 Current income taxes 37,035 40,542 Other
current assets and prepayments 72,079 57,173 Assets held for sale
- 52,271 Total current assets 2,363,547
2,783,658 Property, plant and equipment, net 304,990 285,091
Rental property and equipment, net 193,939 200,380 Long-term
finance receivables 788,066 828,723 Allowance for credit losses
(7,098 ) (9,002 ) Long-term finance receivables, net
780,968 819,721 Goodwill 1,747,950 1,672,721 Intangible
assets, net 223,320 82,173 Non-current income taxes 78,766 96,377
Other assets 560,677 569,110 Total
assets $ 6,254,157 $ 6,509,231
Liabilities,
noncontrolling interests and stockholders' equity
Current liabilities: Accounts payable and accrued liabilities $
1,420,283 $ 1,572,971 Current income taxes 92,803 90,167 Current
portion of long-term debt and notes payable 521,103 324,879 Advance
billings 372,783 386,846 Total
current liabilities 2,406,972 2,374,863 Deferred taxes on
income 119,634 64,839 Tax uncertainties and other income tax
liabilities 85,191 86,127 Long-term debt 2,473,087 2,927,127 Other
non-current liabilities 681,539 682,646
Total liabilities 5,766,423 6,135,602
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 522
548 Common stock, $1 par value 323,338 323,338 Additional
paid-in-capital 155,371 178,852 Retained earnings 5,054,442
4,897,708 Accumulated other comprehensive loss (892,506 ) (846,156
) Treasury stock, at cost (4,449,804 ) (4,477,032 )
Total Pitney Bowes Inc. stockholders' equity 191,364
77,259 Total liabilities, noncontrolling
interests and stockholders' equity $ 6,254,157 $ 6,509,231
Pitney
Bowes Inc. Revenue and EBIT Business Segments
June 30, 2015
(Unaudited)
(Dollars in thousands)
Three Months Ended June 30,
% 2015 2014
Change
Revenue
North America Mailing $ 356,791 $ 371,194 (4 %)
International Mailing 110,610 153,260
(28 %)
Small & Medium Business Solutions 467,401
524,454 (11 %) Production Mail 97,731
111,756 (13 %) Presort Services 113,922
111,281 2 %
Enterprise Business Solutions
211,653 223,037 (5 %) Software
Solutions 99,041 108,820 (9 %) Global Ecommerce 77,966
68,653 14 %
Digital Commerce Solutions
177,007 177,473 - % Other
24,830 33,486 (26 %)
Total
revenue $ 880,891 $ 958,450 (8 %)
EBIT
(1)
North America Mailing $ 159,392 $ 156,781 2 % International
Mailing 14,122 26,449 (47 %)
Small
& Medium Business Solutions 173,514
183,230 (5 %) Production Mail 10,028 10,558 (5 %)
Presort Services 23,544 22,412 5 %
Enterprise Business Solutions 33,572
32,970 2 % Software Solutions 16,158 9,877 64 %
Global Ecommerce 3,056 3,749 (18 %)
Digital Commerce Solutions 19,214
13,626 41 % Other 5,611 4,303
30 %
Total EBIT 231,911 234,129 (1 %)
Unallocated amounts: Interest, net (2) (38,839 ) (41,895 )
Corporate and other expenses (51,921 ) (45,458 ) Restructuring
charges and asset impairments, net (14,350 ) (8,299 ) Other income,
net 93,135 - Acquisition related compensation expense
(10,483 ) -
Income from continuing
operations before income taxes $ 209,453 $ 138,477
(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 June
30, 2015
(Unaudited)
(Dollars in thousands)
Six Months Ended June 30,
% 2015 2014
Change
Revenue
North America Mailing $ 718,665 $ 752,221 (4 %)
International Mailing 226,783 306,528
(26 %)
Small & Medium Business Solutions 945,448
1,058,749 (11 %) Production Mail
197,234 216,972 (9 %) Presort Services 235,453
227,772 3 %
Enterprise Business Solutions
432,687 444,744 (3 %) Software
Solutions 185,278 200,194 (7 %) Global Ecommerce 153,352
132,529 16 %
Digital Commerce Solutions
338,630 332,723 2 % Other
54,807 59,731 (8 %)
Total
revenue $ 1,771,572 $ 1,895,947 (7 %)
EBIT
(1)
North America Mailing $ 323,057 $ 317,119 2 % International
Mailing 25,846 51,268 (50 %)
Small
& Medium Business Solutions 348,903
368,387 (5 %) Production Mail 19,060 18,295 4 %
Presort Services 51,038 46,308 10 %
Enterprise Business Solutions 70,098
64,603 9 % Software Solutions 20,291 11,699 73 %
Global Ecommerce 11,202 9,776 15 %
Digital Commerce Solutions 31,493
21,475 47 % Other 10,569 5,985
77 %
Total EBIT 461,063 460,450 - %
Unallocated amounts: Interest, net (2) (81,673 ) (85,612 )
Corporate and other expenses (102,724 ) (102,062 ) Restructuring
charges and asset impairments, net (14,269 ) (18,140 ) Other income
(expense), net 93,135 (61,657 ) Acquisition related compensation
expense (10,483 ) -
Income from
continuing operations before income taxes $ 345,049 $
192,979 (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)
(Dollars in thousands, except per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2015 2014
2015 2014
GAAP income from continuing operations
after income taxes, as reported
$ 152,509 $ 87,548 $ 232,964 $ 129,420 Restructuring charges and
asset impairments, net 8,613 5,577 8,560 12,258 Gain on sale of
Imagitas (88,429 ) - (88,429 ) - Transaction costs related to
acquisitions and dispositions 6,105 - 6,105 - Legal settlement
4,620 - 4,620 - Acquisition related compensation expense 7,246
-
7,246 - Extinguishment of debt - -
- 37,833
Income from continuing operations after
income taxes, as adjusted
$ 90,664 $ 93,125
$ 171,066 $ 179,511
GAAP diluted earnings per share from
continuing operations, as reported
$ 0.75 $ 0.43 $ 1.15 $ 0.63 Restructuring charges and asset
impairments, net 0.04 0.03 0.04 0.06 Gain on sale of Imagitas (0.44
) - (0.44 ) - Transaction costs related to acquisitions and
dispositions 0.03 - 0.03 - Legal settlement 0.02 - 0.02 -
Acquisition related compensation expense 0.04 - 0.04 -
Extinguishment of debt - - -
0.19
Diluted earnings per share from continuing
operations, as adjusted
$ 0.45 $ 0.46 $
0.84 $ 0.88
GAAP net cash provided by operating
activities, as reported
$ 96,444 $ 174,831 $ 200,331 $ 280,447 Capital expenditures (45,027
) (42,207 ) (88,935 ) (72,350 ) Restructuring payments 8,901 14,593
30,775 33,530 Payments related to investment divestiture 3,215 -
26,375 - Reserve account deposits (1,387 ) 11,803 (21,464 ) (3,356
) Acquisition related compensation payment 10,483 - 10,483 -
Cash transaction fees related to
acquisitions and dispositions
11,116 - 11,116 - Extinguishment of debt - 3,300 - 61,657
Free cash flow, as adjusted $
83,745 $ 162,320 $
168,681 $ 299,928
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)
(Dollars in thousands)
Three Months EndedJune 30,
Six Months EndedJune 30,
2015 2014 2015 2014
GAAP income from continuing operations
after income taxes, as reported
$ 152,509 $ 87,548 $ 232,964 $ 129,420 Restructuring charges and
asset impairments, net 8,613 5,577 8,560 12,258 Gain on sale of
Imagitas (88,429 ) - (88,429 ) - Transaction costs related to
acquisitions and dispositions 6,105 - 6,105 - Legal settlement
4,620 - 4,620 - Acquisition related compensation expense 7,246 -
7,246 - Extinguishment of debt -
- - 37,833
Income from continuing operations after
income taxes, as adjusted
90,664 93,125 171,066 179,511 Provision for income taxes, as
adjusted 45,894 49,057 96,413 84,077
Preferred stock dividends of subsidiaries
attributable to noncontrolling interests
4,593 4,594
9,187 9,188
Income from continuing operations before
income taxes, as adjusted
141,151 146,776 276,666 272,776 Interest, net
38,839 41,895 81,673
85,612
Adjusted EBIT 179,990
188,671 358,339 358,388 Depreciation and
amortization 42,657
49,122 85,153 92,863
Adjusted EBITDA $ 222,647
$ 237,793 $ 443,492
$ 451,251
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version on businesswire.com: http://www.businesswire.com/news/home/20150730005304/en/
Pitney BowesEditorial -Bill Hughes, 203-351-6785Chief
Communications OfficerorFinancial -Charles F. McBride,
203-351-6349VP, Investor Relations
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