Pitney Bowes Announces Full Year and Fourth Quarter 2021 Financial Results
Pitney Bowes (NYSE: PBI), a global shipping and mailing company that provides technology, logistics, and financial services, today announced its financial results for the full year and fourth quarter 2021.
“The fourth quarter capped another important year in our transformation,” said Marc B. Lautenbach, President and CEO, Pitney Bowes. “While not without challenges, we delivered our fifth consecutive year of consolidated revenue growth. In the aggregate, SendTech and Presort grew revenues and EBIT year-over-year, which is a significant achievement. Global Ecommerce had a successful peak in terms of service levels with 99 percent of all committed parcels delivered ahead of the holidays; however, supply chain challenges and shifts in consumer buying behavior led to lower volumes, impacting that segment’s fourth quarter financial results.”
Full Year 2021
Revenue of $3.7 billion, growth of 3 percent, fifth consecutive year of growth; GAAP EPS loss of $0.01, Adjusted EPS of $0.32; GAAP cash from operations of $302 million; Free cash flow of $154 million; Ended the year with $747 million in cash and short-term investments; Reduced debt $241 million and extended our maturity profile; Shipping-related revenues represented 50 percent of total revenue; Global Ecommerce revenue of $1.7 billion, representing growth of 5 percent over prior year, growth of 48 percent versus 2019; Presort Services revenue growth of 10 percent over prior year and EBIT margin of 14 percent; SendTech revenue declined 1 percent over prior year with equipment sales growth of 11 percent.Fourth Quarter 2021
Revenue of $984 million, a decline of 4 percent; GAAP EPS of $0.01, Adjusted EPS of $0.06; GAAP cash from operations of $85 million; Free cash flow of $39 million; Presort Services revenue growth of 16 percent and EBIT growth of 80 percent over prior year; SendTech revenue declined 6 percent over prior year; Global Ecommerce revenue decline of 9 percent over prior year, 46 percent growth versus 2019; Entered into a sale-leaseback agreement for its Shelton facility, which will generate approximately $50 million in proceeds and is anticipated to close in Q1 2022.Earnings per share results are summarized in the table below
Fourth Quarter
Full Year
2021
2020
2021
2020
GAAP EPS
$0.01
$0.11
($0.01)
($1.05)
Discontinued Operations
-
($0.01)
$0.03
($0.06)
GAAP EPS from Continuing Operations
$0.01
$0.10
$0.02
($1.11)
Loss on Debt Refinancing
-
-
$0.24
$0.16
Restructuring Charges
$0.03
$0.04
$0.08
$0.09
Gain on Sale of Assets/Business
-
-
($0.03)
($0.05)
Goodwill Impairment
-
-
-
$1.13
Tax on Surrender of Investment Securities
-
-
-
$0.07
Transaction Costs
$0.01
-
$0.01
-
Adjusted EPS
$0.06
$0.14
$0.32
$0.31
* The sum of the earnings per share may not equal the totals due to rounding.
Business Segment Reporting
Global Ecommerce facilitates domestic retail ecommerce shipping solutions, including delivery, returns and fulfillment, and global cross-border ecommerce transactions.
Presort Services provides sortation services to qualify large volumes of First Class Mail, Marketing Mail, Marketing Mail Flats and Bound Printed Matter for postal workshare discounts.
Sending Technology Solutions offers physical and digital mailing and shipping technology solutions, financing, services, supplies and other applications for small and medium businesses to help simplify and save on the sending, tracking and receiving of letters, parcels and flats.
Global Ecommerce
Full Year
($ millions)
2021
2020
% Change
Reported
% Change
Ex Currency
Revenue
$1,703
$1,619
5%
4%
EBITDA
($20)
($13)
(48%)
EBIT
($99)
($83)
(19%)
Fourth Quarter
($ millions)
2021
2020
% Change
Reported
% Change
Ex Currency
Revenue
$473
$518
(9%)
(9%)
EBITDA
($20)
$3
>(100%)
EBIT
($41)
($15)
>(100%)
Full year revenue growth was primarily driven by higher cross-border volumes. In the fourth quarter, lower revenues were driven by a decrease in Domestic Parcel volumes, which was partly offset by an increase in revenue per parcel. Full year and fourth quarter declines in EBITDA and EBIT were driven primarily by higher transportation and labor spend. In the fourth quarter, lower volumes also adversely impacted margins.
Presort Services
Full Year
($ millions)
2021
2020
% Change
Reported
% Change
Ex Currency
Revenue
$573
$521
10%
10%
EBITDA
$107
$88
22%
EBIT
$80
$56
43%
Fourth Quarter
($ millions)
2021
2020
% Change
Reported
% Change
Ex Currency
Revenue
$156
$135
16%
16%
EBITDA
$30
$21
43%
EBIT
$23
$13
80%
Strong revenue growth for both the full year and fourth quarter were driven by a higher net revenue per piece along with expansion in marketing mail volumes. EBITDA and EBIT improved significantly from prior year despite higher labor and transportation costs.
SendTech Solutions
Full Year
($ millions)
2021
2020
% Change
Reported
% Change
Ex Currency
Revenue
$1,398
$1,414
(1%)
(2%)
EBITDA
$459
$477
(4%)
EBIT
$429
$443
(3%)
Fourth Quarter
($ millions)
2021
2020
% Change
Reported
% Change
Ex Currency
Revenue
$354
$376
(6%)
(5%)
EBITDA
$116
$128
(9%)
EBIT
$109
$120
(9%)
Full year revenue declined marginally as equipment sales growth of 11 percent was more than offset by a 14 percent decline in Financing revenue. The decline in high-margin financing revenue drove lower EBITDA and EBIT. For the fourth quarter, revenue decline was driven by lower equipment and financing revenue, partially offset by higher business services revenue.
2022 Expectations
The Company expects annual revenue and EBIT to grow over prior year in the low-to-mid single digit range.
The Company expects to refine expectations throughout the year, especially as Covid and supply chain issues dissipate.
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.pitneybowes.com.
About Pitney Bowes
Pitney Bowes (NYSE:PBI) is a global shipping and mailing company that provides technology, logistics, and financial services to more than 90 percent of the Fortune 500. Small business, retail, enterprise, and government clients around the world rely on Pitney Bowes to remove the complexity of sending mail and parcels. For additional information, visit: www.pitneybowes.com
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.
Adjusted EBIT, Adjusted EBITDA and Adjusted EPS exclude the impact of discontinued operations, restructuring charges, gains, losses and costs related to acquisitions and dispositions, asset impairment charges, goodwill impairment charges and other unusual or one-time items. Such items are often inconsistent in amount and frequency and as such, the Company believes that these non-GAAP measures provide investors greater insight into the 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 is calculated by converting the current period non-U.S. dollar denominated revenue using the prior year’s exchange rate for the comparable quarter. We believe that excluding the impacts of currency exchange rates provides investors a better understanding of the underlying revenue performance.
Free cash flow adjusts cash from operations calculated in accordance with GAAP for discontinued operations, capital expenditures, restructuring payments, changes in customer deposits held at the Pitney Bowes Bank, transaction costs and other special items. The Company reports free cash flow to provide investors insight into the amount of cash that management could have available for other discretionary uses.
Segment EBIT is the primary measure of profitability and operational performance at the segment level and is determined by deducting from segment revenue the related costs and expenses attributable to the segment. Segment EBIT excludes interest, taxes, unallocated corporate expenses, restructuring charges and other unusual or one-time items. The Company also reports segment EBITDA as an additional useful measure of segment profitability and operational performance.
Complete reconciliations of non-GAAP measures to comparable GAAP measures can be found in the attached financial schedules and at the Company's web site at 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 future revenue and earnings guidance and 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. In particular, we continue to navigate the impacts of the Covid-19 pandemic (Covid-19), and the effect that its unpredictability is having on our, and our client’s business, financial performance and results of operations. Other factors which could cause future financial performance to differ materially from expectations, and which may also be exacerbated by Covid-19 or a negative change in the economy, include, without limitation, declining physical mail volumes; changes in postal regulations or the operations and financial health of posts in the U.S. or other major markets or changes to the broader postal or shipping markets; the loss of, or significant changes to, our contractual relationships with the United States Postal Service (USPS) or USPS’ performance under those contracts; our ability to continue to grow and manage volumes, gain additional economies of scale and improve profitability within our Global Ecommerce segment; changes in labor and transportation availability and costs; ; and other factors as more fully outlined in the Company's 2020 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, EBIT and EBITDA by business segment; and reconciliations of GAAP to non-GAAP measures for the three months and twelve months ended December 31, 2021 and 2020, and consolidated balance sheets at December 30, 2021 and 2020 are attached.
2021
2020
2021
2020
Revenue: Business services
$
645,814
$
666,983
$
2,334,674
$
2,191,306
Support services
113,622
119,972
460,888
473,292
Financing
71,217
80,276
294,418
341,034
Equipment sales
93,834
101,200
350,138
314,882
Supplies
40,348
41,165
159,438
159,282
Rentals
18,877
18,821
74,005
74,279
Total revenue
983,712
1,028,417
3,673,561
3,554,075
Costs and expenses: Cost of business services
579,913
592,137
2,034,477
1,904,078
Cost of support services
37,060
35,856
149,706
149,988
Financing interest expense
11,690
12,108
47,059
48,162
Cost of equipment sales
66,292
69,821
251,914
235,153
Cost of supplies
11,597
10,928
43,980
41,679
Cost of rentals
5,487
7,145
24,427
25,600
Selling, general and administrative
224,847
242,441
924,163
963,323
Research and development
13,781
9,546
46,777
38,384
Restructuring charges
7,569
8,207
19,003
20,712
Goodwill impairment
-
-
-
198,169
Interest expense, net
23,070
26,249
96,886
105,753
Other components of net pension and postretirement expense (income)
302
(1,834
)
1,010
(1,708
)
Other expense (income), net
633
(1,636
)
41,574
8,151
Total costs and expenses
982,241
1,010,968
3,680,976
3,737,444
Income (loss) from continuing operations before taxes
1,471
17,449
(7,415
)
(183,369
)
(Benefit) provision for income taxes
(320
)
(350
)
(10,922
)
7,122
Income (loss) from continuing operations
1,791
17,799
3,507
(190,491
)
(Loss) income from discontinued operations, net of tax
(524
)
2,467
(4,858
)
10,115
Net income (loss)
$
1,267
$
20,266
$
(1,351
)
$
(180,376
)
Basic earnings (loss) per share (1): Continuing operations$
0.01
$
0.10
$
0.02
$
(1.11
)
Discontinued operations
-
0.01
(0.03
)
0.06
Net income (loss)
$
0.01
$
0.12
$
(0.01
)
$
(1.05
)
Diluted earnings (loss) per share (1): Continuing operations$
0.01
$
0.10
$
0.02
$
(1.11
)
Discontinued operations
-
0.01
(0.03
)
0.06
Net income (loss)
$
0.01
$
0.11
$
(0.01
)
$
(1.05
)
Weighted-average shares used in diluted earnings per share
179,506
176,835
179,105
171,519
(1
)
The sum of the earnings per share amounts may not equal the totals due to rounding.2021 December 31,
2020 Current assets: Cash and cash equivalents
$
732,480
$
921,450
Short-term investments
14,440
18,974
Accounts and other receivables, net
334,630
389,240
Short-term finance receivables, net
560,680
568,050
Inventories
78,588
71,480
Current income taxes
13,894
23,219
Other current assets and prepayments
154,165
120,145
Total current assets
1,888,877
2,112,558
Property, plant and equipment, net
429,162
391,280
Rental property and equipment, net
34,774
38,435
Long-term finance receivables, net
587,427
605,292
Goodwill
1,135,103
1,152,285
Intangible assets, net
132,442
159,839
Operating lease assets
208,428
201,916
Noncurrent income taxes
68,398
71,244
Other assets
471,084
491,514
Total assets
$
4,955,695
$
5,224,363
Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued liabilities
$
919,367
$
880,616
Customer deposits at Pitney Bowes Bank
632,062
617,200
Current operating lease liabilities
40,299
39,182
Current portion of long-term debt
24,739
216,032
Advance billings
99,280
114,550
Current income taxes
9,017
2,880
Total current liabilities
1,724,764
1,870,460
Long-term debt
2,299,099
2,348,361
Deferred taxes on income
286,445
279,451
Tax uncertainties and other income tax liabilities
31,935
38,163
Noncurrent operating lease liabilities
192,092
180,292
Other noncurrent liabilities
308,728
437,015
Total liabilities
4,843,063
5,153,742
Stockholders' equity: Common stock
323,338
323,338
Additional paid-in-capital
2,485
68,502
Retained earnings
5,169,270
5,205,421
Accumulated other comprehensive loss
(780,312
)
(839,131
)
Treasury stock, at cost
(4,602,149
)
(4,687,509
)
Total stockholders' equity
112,632
70,621
Total liabilities and stockholders' equity
$
4,955,695
$
5,224,363
2021
2020
% Change
2021
2020
% Change
Global Ecommerce$
473,054
$
518,140
(9
%)
$
1,702,580
$
1,618,897
5
%
Presort Services
156,439
134,660
16
%
573,480
521,212
10
%
Sending Technology Solutions
354,219
375,617
(6
%)
1,397,501
1,413,966
(1
%)
Total revenue - GAAP
983,712
1,028,417
(4
%)
3,673,561
3,554,075
3
%
Currency impact on revenue
(317
)
-
(27,910
)
-
Revenue, at constant currency$
983,395
$
1,028,417
(4
%)
$
3,645,651
$
3,554,075
3
%
2021
2020
% change EBIT (1) D&A EBITDA EBIT (1) D&A EBITDA EBIT EBITDA Global Ecommerce$
(40,516
)
$
20,957
$
(19,559
)
$
(14,768
)
$
17,490
$
2,722
>(100%) >(100%) Presort Services
23,474
6,711
30,185
13,041
8,107
21,148
80
%
43
%
Sending Technology Solutions
108,874
7,116
115,990
119,506
8,545
128,051
(9
%)
(9
%)
Segment total$
91,832
$
34,784
126,616
$
117,779
$
34,142
151,921
(22
%)
(17
%)
Reconciliation of Segment EBITDA to Net Income: Segment depreciation and amortization
(34,784
)
(34,142
)
Unallocated corporate expenses
(44,817
)
(53,766
)
Restructuring charges
(7,569
)
(8,207
)
Loss on debt refinancing
(633
)
-
Transaction costs
(2,582
)
-
Interest, net
(34,760
)
(38,357
)
Benefit for income taxes
320
350
Income from continuing operations
1,791
17,799
(Loss) income from discontinued operations, net of tax
(524
)
2,467
Net income
$
1,267
$
20,266
Twelve months ended December 31,
2021
2020
% change EBIT (1) D&A EBITDA EBIT (1) D&A EBITDA EBIT EBITDA Global Ecommerce$
(98,673
)
$
79,128
$
(19,545
)
$
(82,894
)
$
69,676
$
(13,218
)
(19
%)
(48
%)
Presort Services
79,721
27,243
106,964
55,799
31,769
87,568
43
%
22
%
Sending Technology Solutions
429,415
29,951
459,366
442,648
34,316
476,964
(3
%)
(4
%)
Segment Total$
410,463
$
136,322
546,785
$
415,553
$
135,761
551,314
(1
%)
(1
%)
Reconciliation of Segment EBITDA to Net Loss: Segment depreciation and amortization
(136,322
)
(135,761
)
Unallocated corporate expenses
(207,774
)
(200,406
)
Restructuring charges
(19,003
)
(20,712
)
Gain on sale of assets/business
11,635
11,908
Loss on debt refinancing
(56,209
)
(36,987
)
Goodwill impairment
-
(198,169
)
Transaction costs
(2,582
)
(641
)
Interest, net
(143,945
)
(153,915
)
Benefit (provision) for income taxes
10,922
(7,122
)
Income (loss) from continuing operations
3,507
(190,491
)
(Loss) income from discontinued operations, net of tax
(4,858
)
10,115
Net loss
$
(1,351
)
$
(180,376
)
(1) Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, and other items that are not allocated to a particular business segment.
2021
2020
2021
2020
Reconciliation of reported net income (loss) to adjusted EBIT and EBITDA Net income (loss)
$
1,267
$
20,266
$
(1,351
)
$
(180,376
)
Loss (income) from discontinued operations, net of tax
524
(2,467
)
4,858
(10,115
)
(Benefit) provision for income taxes
(320
)
(350
)
(10,922
)
7,122
Income (loss) from continuing operations before taxes
1,471
17,449
(7,415
)
(183,369
)
Restructuring charges
7,569
8,207
19,003
20,712
Gain on sale of assets/business
-
-
(11,635
)
(11,908
)
Loss on debt refinancing
633
-
56,209
36,987
Goodwill impairment
-
-
-
198,169
Transaction costs
2,582
-
2,582
641
Adjusted net income before tax
12,255
25,656
58,744
61,232
Interest, net
34,760
38,357
143,945
153,915
Adjusted EBIT
47,015
64,013
202,689
215,147
Depreciation and amortization
41,634
40,222
162,859
160,625
Adjusted EBITDA
$
88,649
$
104,235
$
365,548
$
375,772
Reconciliation of reported diluted earnings (loss) per share to adjusted diluted earnings per share (1) Diluted earnings (loss) per share
$
0.01
$
0.11
$
(0.01
)
$
(1.05
)
Loss (income) from discontinued operations, net of tax
-
(0.01
)
0.03
(0.06
)
Restructuring charges
0.03
0.04
0.08
0.09
Gain on sale of assets/business
-
-
(0.03
)
(0.05
)
Loss on debt refinancing
-
-
0.24
0.16
Goodwill impairment
-
-
-
1.13
Tax on surrender of investment securities
-
-
-
0.07
Transaction costs
0.01
-
0.01
-
Adjusted diluted earnings per share
$
0.06
$
0.14
$
0.32
$
0.31
Reconciliation of reported net cash from operating activities to free cash flow Net cash provided by operating activities
$
85,341
$
110,806
$
301,515
$
301,972
Net cash (provided by) used in operating activities - discontinued operations
-
(511
)
-
37,912
Capital expenditures
(43,135
)
(24,200
)
(184,042
)
(104,987
)
Restructuring payments
7,143
4,145
21,990
20,014
Change in customer deposits at PB Bank
(10,650
)
6,618
14,862
26,082
Transaction costs paid
-
-
-
2,117
Free cash flow
$
38,699
$
96,858
$
154,325
$
283,110
(1) The sum of the earnings per share amounts may not equal the totals due to rounding.
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