Pitney Bowes : Financial Statements Q1 2021

Pitney Bowes Inc.

Consolidated Statements of Loss

(Unaudited; in thousands, except per share amounts)

		Three months ended March 31,
		2021			2020
Revenue:
Business services	$	570,454	$	444,379
Support services		118,697			122,015
Financing		77,812			89,078
Equipment sales		86,803			76,273
Supplies		42,224			45,709
Rentals		19,207			18,814
Total revenue		915,197			796,268
Costs and expenses:
Cost of business services		499,534			374,665
Cost of support services		36,717			39,760
Financing interest expense		11,886			12,489
Cost of equipment sales		61,840			57,359
Cost of supplies		11,211			12,240
Cost of rentals		6,447			6,378
Selling, general and administrative		238,102			248,633
Research and development		11,316			12,116
Restructuring charges		2,889			3,817
Goodwill impairment		-			198,169
Interest expense, net		25,158			25,883
Other components of net pension and postretirement expense (income)		350			(151)
Other expense, net		51,394			33,487
Total costs and expenses		956,844			1,024,845
Loss from continuing operations before taxes		(41,647)			(228,577)
Benefit for income taxes		(13,992)			(10,030)
Loss from continuing operations		(27,655)			(218,547)
(Loss) income from discontinued operations, net of tax		(3,886)			10,064
Net loss	$	(31,541)	$	(208,483)
Basic loss per share (1):
Continuing operations	$	(0.16)	$	(1.28)
Discontinued operations		(0.02)			0.06
Net loss	$	(0.18)	$	(1.22)
Diluted loss per share (1):
Continuing operations	$	(0.16)	$	(1.28)
Discontinued operations		(0.02)			0.06
Net loss	$	(0.18)	$	(1.22)
Weighted-average shares used in diluted earnings per share		172,856			170,912

(1) The sum of the earnings per share amounts may not equal the totals due to rounding.

Pitney Bowes Inc.

Consolidated Balance Sheets

(Unaudited; in thousands)

		March 31,			December 31,
Assets		2021			2020
Current assets:
Cash and cash equivalents	$	680,727	$	921,450
Short-term investments		16,200			18,974
Accounts and other receivables, net		327,755			389,240
Short-term finance receivables, net		551,061			568,050
Inventories		63,680			65,845
Current income taxes		44,288			23,219
Other current assets and prepayments		124,394			120,145
Total current assets		1,808,105			2,106,923
Property, plant and equipment, net		405,226			391,280
Rental property and equipment, net		37,708			38,435
Long-term finance receivables, net		597,012			605,292
Goodwill		1,144,064			1,152,285
Intangible assets, net		152,265			159,839
Operating lease assets		196,843			201,916
Noncurrent income taxes		68,732			72,653
Other assets		531,226			491,514
Total assets	$	4,941,181	$	5,220,137
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities	$	820,286	$	880,616
Customer deposits at Pitney Bowes Bank		589,406			617,200
Current operating lease liabilities		39,587			39,182
Current portion of long-term debt		19,972			216,032
Advance billings		118,166			114,550
Current income taxes		6,839			2,880
Total current liabilities		1,594,256			1,870,460
Long-term debt		2,418,885			2,348,361
Deferred taxes on income		282,192			279,451
Tax uncertainties and other income tax liabilities		37,936			38,163
Noncurrent operating lease liabilities		174,798			180,292
Other noncurrent liabilities		413,951			437,015
Total liabilities		4,922,018			5,153,742
Stockholders' equity:
Common stock		323,338			323,338
Additional paid-in-capital		15,269			68,502
Retained earnings		5,161,029			5,201,195
Accumulated other comprehensive loss		(847,538)			(839,131)
Treasury stock, at cost		(4,632,935)			(4,687,509)
Total stockholders' equity		19,163			66,395
Total liabilities and stockholders' equity	$	4,941,181	$	5,220,137

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

		Three months ended March 31,
		2021			2020		% Change
Global Ecommerce	$	413,086	$	292,323	41%
Presort Services		143,126			140,720	2%
Sending Technology Solutions		358,985			363,225		(1%)
Total revenue - GAAP		915,197			796,268	15%
Currency impact on revenue		(8,803)			-
Revenue, at constant currency
$	906,394		$	796,268		14%

Pitney Bowes Inc.

Business Segment EBIT & EBITDA

(Unaudited; in thousands)

							Three months ended March 31,
				2021							2020				% change
	EBIT (1)		D&A		EBITDA			EBIT (1)		D&A		EBITDA		EBIT	EBITDA
Global Ecommerce	$	(26,376)	$	18,176	$	(8,200)	$	(29,475)	$	18,065	$	(11,410)	11%	28%
Presort Services		19,051		7,499		26,550			15,695		7,774		23,469	21%	13%
Sending Technology Solutions		114,470		7,604		122,074			106,562		9,039		115,601	7%	6%
Segment total	$	107,145	$	33,279		140,424		$	92,782	$	34,878		127,660		15%	10%
Reconciliation of Segment EBITDA to Net Income:
Segment depreciation and amortization						(33,279)							(34,878)
Unallocated corporate expenses						(57,465)							(43,722)
Restructuring charges						(2,889)							(3,817)
Interest, net						(37,044)							(38,372)
Goodwill impairment						-							(198,169)
Loss on debt refinancing						(51,394)							(36,987)
Transaction costs						-							(292)
Benefit for income taxes						13,992							10,030
Loss from continuing operations						(27,655)							(218,547)
(Loss) income from discontinued operations, net of tax					(3,886)							10,064
Net loss					$	(31,541)						$	(208,483)

(1) Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, and other items that are not allocated to a particular business segment.

Pitney Bowes Inc.

Reconciliation of Reported Consolidated Results to Adjusted Results (Unaudited; in thousands, except per share amounts)

		Three months ended March
			31,
			2021			2020
Reconciliation of reported net loss to adjusted EBIT and EBITDA
Net loss	$	(31,541)		$	(208,483)
Loss (income) from discontinued operations, net of tax			3,886			(10,064)
Benefit for income taxes			(13,992)			(10,030)
Loss from continuing operations before taxes			(41,647)			(228,577)
Restructuring charges			2,889			3,817
Goodwill impairment			-			198,169
Loss on debt refinancing			51,394			36,987
Transaction costs			-			292
Adjusted net income before tax			12,636			10,688
Interest, net			37,044			38,372
Adjusted EBIT			49,680			49,060
Depreciation and amortization			39,594			40,719
Adjusted EBITDA		$	89,274		$	89,779
Reconciliation of reported diluted loss per share to adjusted diluted
earnings per share
Diluted loss per share	$	(0.18)		$	(1.22)
Loss (income) from discontinued operations, net of tax			0.02			(0.06)
Restructuring charges			0.01			0.02
Goodwill impairment			-			1.15
Loss on debt refinancing			0.22			0.16
Adjusted diluted earnings per share (1)	$	0.07		$	0.05
Reconciliation of reported net cash from operating activities to free
cash flow
Net cash provided by (used in) operating activities	$	65,924		$	(67,355)
Net cash used in operating activities - discontinued operations			-			37,805
Capital expenditures			(43,328)			(25,778)
Restructuring payments			3,955			6,047
Change in customer deposits at PB Bank			(27,794)			(888)
Transaction costs paid			-			1,740
Free cash flow	$	(1,243)		$	(48,429)

1. The sum of the earnings per share amounts may not equal the totals due to rounding.