Pitney Bowes : Financial Statements Q2 2021

Pitney Bowes Inc.

Consolidated Statements of Operations

(Unaudited; in thousands, except per share amounts)

Three months ended June 30,		Six months ended June 30,
2021	2020	2021	2020

Revenue:
Business services	$
Support services
Financing
Equipment sales
Supplies
Rentals
Total revenue
Costs and expenses:
Cost of business services
Cost of support services
Financing interest expense
Cost of equipment sales
Cost of supplies
Cost of rentals
Selling, general and administrative
Research and development
Restructuring charges
Goodwill impairment
Interest expense, net
Other components of net pension and postretirement cost
Other (income) expense
Total costs and expenses
Income (loss) from continuing operations before taxes
Provision (benefit) for income taxes
Income (loss) from continuing operations
(Loss) income from discontinued operations, net of tax
Net income (loss)	$
Basic earnings (loss) per share (1):
Continuing operations	$
Discontinued operations
Net income (loss)	$
Diluted earnings (loss) per share (1):
Continuing operations	$
Discontinued operations
Net income (loss)	$

567,022 $

115,156

73,453

86,267

38,655

18,650

899,203

482,814

37,679

11,773

61,561

10,467

6,013

236,190

11,059

4,844

-

24,346

312

(13,646)

873,412

25,791

4,915

20,876

(1,020)

19,856 $

0.12 $

(0.01)

1. $
2. $
   (0.01)

0.11 $

528,990$

113,786

85,462

57,837

32,773

18,644

837,492

454,311

36,725

11,939

47,920

8,379

6,022

233,631

7,467

4,922

-

26,446

386

(17,375)

820,773

16,719

17,016

(297)

(3,032)

(3,329) $

• $
  (0.02)

(0.02) $

• $
  (0.02)
  (0.02) $

1,137,476	$	973,369
233,853		235,801
151,265		174,540
173,070		134,110
80,879		78,482
37,857		37,458
1,814,400		1,633,760
982,348		828,976
74,396		76,485
23,659		24,428
123,401		105,279
21,678		20,619
12,460		12,400
474,292		482,264
22,375		19,583
7,733		8,739
-		198,169
49,504		52,329
662		235
37,748		16,112
1,830,256		1,845,618
(15,856)		(211,858)
(9,077)		6,986
(6,779)		(218,844)
(4,906)		7,032
(11,685)	$	(211,812)
(0.04)	$	(1.28)
(0.03)		0.04
(0.07)	$	(1.24)
(0.04)	$	(1.28)
(0.03)		0.04
(0.07)	$	(1.24)

Weighted-average shares used in diluted earnings per share	178,979	171,478	173,367	171,167

(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)

		June 30,			December 31,
Assets		2021			2020
Current assets:
Cash and cash equivalents	$	799,470	$	921,450
Short-term investments		14,904			18,974
Accounts and other receivables, net		309,177			389,240
Short-term finance receivables, net		552,858			568,050
Inventories		67,538			65,845
Current income taxes		37,384			23,219
Other current assets and prepayments		117,425			120,145
Total current assets		1,898,756			2,106,923
Property, plant and equipment, net		429,785			391,280
Rental property and equipment, net		38,814			38,435
Long-term finance receivables, net		588,602			605,292
Goodwill		1,130,164			1,152,285
Intangible assets, net		144,692			159,839
Operating lease assets		205,584			201,916
Noncurrent income taxes		69,150			72,653
Other assets		507,748			491,514
Total assets	$	5,013,295	$	5,220,137
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities	$	820,065	$	880,616
Customer deposits at Pitney Bowes Bank		632,833			617,200
Current operating lease liabilities		41,835			39,182
Current portion of long-term debt		97,015			216,032
Advance billings		119,645			114,550
Current income taxes		5,844			2,880
Total current liabilities		1,717,237			1,870,460
Long-term debt		2,330,698			2,348,361
Deferred taxes on income		286,338			279,451
Tax uncertainties and other income tax liabilities		37,155			38,163
Noncurrent operating lease liabilities		182,746			180,292
Other noncurrent liabilities		405,751			437,015
Total liabilities		4,959,925			5,153,742
Stockholders' equity:
Common stock		323,338			323,338
Additional paid-in-capital		5,903			68,502
Retained earnings		5,172,185			5,201,195
Accumulated other comprehensive loss		(831,303)			(839,131)
Treasury stock, at cost		(4,616,753)			(4,687,509)
Total stockholders' equity		53,370			66,395
Total liabilities and stockholders' equity	$	5,013,295	$	5,220,137

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

		Three months ended June 30,			Six months ended June 30,
		2021			2020		% Change			2021			2020		% Change
Global Ecommerce	$	418,429	$	398,453	5%	$	831,515	$	690,776	20%
Presort Services		134,619			118,127	14%			277,745			258,847	7%
Sending Technology Solutions		346,155			320,912		8%			705,140			684,137		3%
Total revenue - GAAP		899,203			837,492	7%			1,814,400			1,633,760	11%
Currency impact on revenue		(13,521)			-					(22,324)			-
Revenue, at constant currency
$	885,682		$	837,492		6%		$	1,792,076		$	1,633,760		10%

Pitney Bowes Inc.

Business Segment EBIT & EBITDA

(Unaudited; in thousands)

							Three months ended June 30,
				2021							2020					% change
		EBIT (1)		D&A		EBITDA			EBIT (1)		D&A			EBITDA		EBIT	EBITDA
Global Ecommerce	$	(10,831)	$	19,060	$	8,229	$	(18,894)	$	17,297		$	(1,597)	43%	>100%
Presort Services		16,134		6,798		22,932			12,582		7,857			20,439	28%	12%
Sending Technology Solutions		107,121		7,537		114,658			104,268		8,776			113,044	3%	1%
Segment total	$	112,424	$	33,395		145,819		$	97,956	$	33,930			131,886		15%	11%
Reconciliation of Segment EBITDA to Net Income (Loss):
Segment depreciation and amortization						(33,395)								(33,930)
Unallocated corporate expenses						(56,316)								(49,489)
Restructuring charges						(4,844)								(4,922)
Gain on sale of business						10,201								-
Gain on sale of assets						1,434								-
Loss on debt refinancing						(989)								-
Gain on sale of equity investment						-								11,908
Transaction costs						-								(349)
Interest, net						(36,119)								(38,385)
Provision for income taxes						(4,915)								(17,016)
Income (loss) from continuing operations						20,876								(297)
Loss from discontinued operations, net of tax						(1,020)								(3,032)
Net income (loss)					$	19,856							$	(3,329)

								Six months ended June 30,
				2021							2020				% change
		EBIT (1)		D&A		EBITDA			EBIT (1)		D&A		EBITDA		EBIT	EBITDA
Global Ecommerce	$	(37,207)	$	37,236	$	29	$	(48,369)	$	35,363	$	(13,006)	23%	>100%
Presort Services		35,185		14,297		49,482			28,277		15,631		43,908	24%	13%
Sending Technology Solutions		221,591		15,140		236,731			210,830		17,815		228,645	5%	4%
Segment Total
$	219,569	$	66,673		286,242		$	190,738	$	68,809		259,547		15%	10%
Reconciliation of Segment EBITDA to Net Loss:
Segment depreciation and amortization						(66,673)							(68,809)
Unallocated corporate expenses						(113,781)							(93,211)
Restructuring charges						(7,733)							(8,739)
Loss on debt refinancing						(52,383)							(36,987)
Gain on sale of business						10,201							-
Gain on sale of assets						1,434							-
Goodwill impairment						-							(198,169)
Gain on sale of equity investment						-							11,908
Transaction costs						-							(641)
Interest, net						(73,163)							(76,757)
Benefit (provision) for income taxes						9,077							(6,986)
Loss from continuing operations						(6,779)							(218,844)
(Loss) income from discontinued operations, net of tax				(4,906)							7,032
Net loss					$	(11,685)						$	(211,812)

(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 June 30,		Six months ended June 30,
			2021			2020			2021			2020
Reconciliation of reported net income (loss) to adjusted EBIT and
EBITDA
Net income (loss)	$	19,856	$	(3,329)	$	(11,685)	$	(211,812)
Loss (income) from discontinued operations, net of tax			1,020			3,032			4,906			(7,032)
Provision (benefit) for income taxes			4,915			17,016			(9,077)			6,986
Income (loss) from continuing operations before taxes			25,791			16,719			(15,856)			(211,858)
Restructuring charges			4,844			4,922			7,733			8,739
Gain on sale of business			(10,201)			-			(10,201)			-
Gain on sale of assets			(1,434)			-			(1,434)			-
Loss on debt refinancing			989			-			52,383			36,987
Goodwill impairment			-			-			-			198,169
Gain on sale of equity investment			-			(11,908)			-			(11,908)
Transaction costs			-			349			-			641
Adjusted net income before tax			19,989			10,082			32,625			20,770
Interest, net			36,119			38,385			73,163			76,757
Adjusted EBIT			56,108			48,467			105,788			97,527
Depreciation and amortization			39,822			41,068			79,416			81,787
Adjusted EBITDA		$	95,930		$	89,535		$	185,204		$	179,314
Reconciliation of reported diluted earnings (loss) per share to
adjusted diluted earnings per share (1)
Diluted earnings (loss) per share	$	0.11	$	(0.02)	$	(0.07)	$	(1.24)
Loss (income) from discontinued operations, net of tax			0.01			0.02			0.03			(0.04)
Restructuring charges			0.02			0.02			0.03			0.03
Gain on sale of business			(0.02)			-			(0.02)			-
Gain on sale of assets			(0.01)			-			(0.01)			-
Loss on debt refinancing			-			-			0.22			0.16
Goodwill impairment			-			-			-			1.14
Gain on sale of equity investment			-			(0.05)			-			(0.05)
Tax on surrender of company owned life insurance policies			-			0.07			-			0.07
Adjusted diluted earnings per share	$	0.11	$	0.04	$	0.19	$	0.09
Reconciliation of reported net cash from operating activities to free
cash flow
Net cash from operating activities	$	78,805	$	153,777	$	144,729	$	86,422
Net cash used in operating activities - discontinued operations			-			618			-			38,423
Capital expenditures			(40,375)			(34,176)			(83,703)			(59,954)
Restructuring payments			4,870			5,318			8,825			11,365
Change in customer deposits at PB Bank			43,427			23,219			15,633			22,331
Transaction costs paid			-			377			-			2,117
Free cash flow	$	86,727	$	149,133	$	85,484	$	100,704

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