Pitney Bowes (NYSE:PBI), a global shipping and mailing company that provides technology, logistics, and financial services, today announced its financial results for the second quarter 2023.

"We saw similar trends that affected first quarter results continue into the second quarter, and we took several significant actions to position the company well for the second half of the year," said Marc B. Lautenbach, President and Chief Executive Officer. "SendTech and Presort both grew profits, while the decline in cross-border weighed on the performance of Global Ecommerce. Domestic parcel volumes grew close to 30 percent, which we expect to continue in the second half. Importantly, the refinancing of our 2024 notes and execution of the restructuring plan announced last quarter further position the company for the long-term."

Second Quarter Financial Highlights

Revenue in the quarter was $776 million, a decrease of 11 percent on a reported basis and 5 percent on a comparable basis versus prior year ⁽¹⁾
GAAP EPS was a loss of $0.81 and Adjusted EPS was a loss of $0.02 in the quarter versus GAAP EPS and Adjusted EPS of $0.02 in second quarter 2022
GAAP EPS a includes a loss of $0.67 for a non-cash goodwill impairment charge related to the Global Ecommerce segment resulting from performance through June 30, 2023 and continuing changes in macroeconomic conditions
GAAP cash from operating activities was breakeven; Free Cash Flow was a net use of $11 million
Cash and short-term investments were $561 million at quarter-end
On track to deliver $75 million in annual expense savings by yearend 2024 from the previously announced restructuring plan and productivity efforts
Signed a $275 million private placement offering in July 2023; net proceeds will be used to redeem the outstanding balance of the 2024 Notes and a portion of the Term Loan A

Second Quarter Business Highlights

Global Ecommerce processed 50 million domestic parcels in the quarter, which is up 29 percent from second quarter 2022
Presort grew Adjusted Segment EBIT by 59 percent and Adjusted Segment EBIT margins by 500 basis points versus prior year
SendTech grew Adjusted Segment EBIT by 2 percent and Adjusted Segment EBIT margins by 200 basis points versus prior year
SendTech shipping-related revenues increased 14 percent year-over-year; SaaS subscription revenues increased 29 percent
Segment Adjusted EBIT was $80 million in the quarter and flat versus prior year

(1) Comparable basis is defined in the "Use of Non-GAAP Measures" section

Earnings per share results are summarized in the table below:


	Second Quarter
	2023	2022
GAAP EPS	($0.81)	$0.02
Goodwill Impairment	$0.67	-
Restructuring Charges	$0.09	$0.02
Proxy Solicitation Fees	$0.02	-
Tax Benefit on Sale of Business	-	($0.03)
Loss on Sale of Business, Including Transaction Costs	-	$0.02
Adjusted EPS ⁽²⁾	($0.02)	$0.02
(2) The sum of the earnings per share may not equal the totals due to rounding.

Business Segment Reporting

Global Ecommerce

Global Ecommerce provides business to consumer logistics services for domestic and cross-border delivery, returns and fulfillment.

	Second Quarter
($ millions)	2023	2022	% Change Reported	% Change Comparable Basis
Revenue	$313	$394	(21%)	(9%)
Adjusted Segment EBITDA	($21)	($7)	>(100%)
Adjusted Segment EBIT	($38)	($29)	(32%)

Revenue and Adjusted Segment EBIT decline was driven by the continuing weakness in cross-border, specifically from a change in how two clients access our offerings.

These declines were partially offset by a 19 percent increase in Domestic parcel revenue and lower operating expenses in the quarter.

Presort Services

Presort Services provides sortation services that enable clients to qualify for USPS workshare discounts in First Class Mail, Marketing Mail, Marketing Mail Flats and Bound Printed Matter.

	Second Quarter
($ millions)	2023	2022	% Change Reported
Revenue	$143	$139	3%
Adjusted Segment EBITDA	$29	$20	45%
Adjusted Segment EBIT	$20	$13	59%

Presort processed 3.6 billion pieces, which represented a decline of 5 percent versus prior year. Revenue per piece improvement and growth in higher yielding mail classes drove growth in revenue.

Adjusted Segment EBIT growth versus prior year driven by higher revenue, improved labor productivity from investments in automation, and lower unit transportation costs.

SendTech Solutions

Sending Technology Solutions offers physical and digital mailing and shipping technology solutions, financing, services, supplies and other applications for small and medium businesses, retail, enterprise, and government clients around the world to help simplify and save on the sending, tracking and receiving of letters, parcels and flats.

	Second Quarter
($ millions)	2023	2022	% Change Reported	% Change Comparable Basis
Revenue	$321	$339	(5%)	(4%)
Adjusted Segment EBITDA	$105	$103	1%
Adjusted Segment EBIT	$97	$96	2%

Decline in segment revenue was primarily driven by lower in-period equipment sales as we entered a phase of our product lifecycle where we have less new lease opportunities offset by a corresponding increase in lease extensions. Growth in shipping-related revenues partially offset the decline in revenues.

Simplification and cost reduction actions more than offset the secular mailing install base decline, driving improvement in Adjusted Segment EBIT.

Full Year 2023 Guidance

We expect full year revenue to be on the lower end of our previously provided guidance, resulting in relatively flat growth on a comparable basis.

We continue to expect adjusted EBIT performance to outpace the percent change in revenue.

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.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

Our financial results are reported in accordance with generally accepted accounting principles (GAAP). We also disclose certain non-GAAP measures, such as adjusted earnings before interest and taxes (Adjusted EBIT), adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), adjusted earnings per share (Adjusted EPS), revenue growth on a comparable basis and free cash flow.

Adjusted EBIT, Adjusted EBITDA and Adjusted EPS exclude the impact of restructuring charges, goodwill impairment, gains, losses and costs related to the sale of assets, acquisitions and dispositions, losses on debt redemptions and refinancings and other unusual items. Management believes that these non-GAAP measures provide investors greater insight into the underlying operating trends of the business.

We disclose revenue growth on a comparable basis, which excludes three items. First, the comparison excludes the impacts of foreign currency. Second, we are excluding the impact of the divestiture of the Borderfree business effective July 1, 2022. Third, we are excluding the impact of a change in the presentation of revenue beginning in the fourth quarter of 2022, from a gross basis to net basis due to an adjustment in terms of one of our contracts with the United States Postal Service. The change in revenue presentation impacts both our Global Ecommerce and SendTech Solutions segments. The change in revenue presentation does not impact gross profit. Management believes that excluding these items provides investors with a better understanding of the underlying revenue performance.

Free cash flow adjusts cash flow from operations calculated in accordance with GAAP for capital expenditures, restructuring payments and other special items. Management believes free cash flow provides investors better insight into the amount of cash available for other discretionary uses.

Adjusted 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. Adjusted Segment EBIT excludes interest, taxes, unallocated corporate expenses, restructuring charges, goodwill impairment, and other items not allocated to a business segment. The Company also reports Adjusted 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. Factors which could cause future financial performance to differ materially from expectations 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; our ability to continue to grow and manage unexpected fluctuations in volumes, gain additional economies of scale and improve profitability within our Global Ecommerce segment; the loss of some of our larger clients in our Global Ecommerce and Presort Services segments; the loss of, or significant changes to, United States Postal Service (USPS) commercial programs, or our contractual relationships with the USPS or their performance under those contracts; the impacts on our cost of debt due to recent increases in interest rates and the potential for future interest rate hikes ; and other factors as more fully outlined in the Company's 2022 Form 10-K Annual Report and other reports filed with the Securities and Exchange Commission during 2023. 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, adjusted segment EBIT and adjusted segment EBITDA by business segment; and reconciliations of GAAP to non-GAAP measures for the three months ended June 30, 2023 and 2022, and consolidated balance sheets at June 30, 2023 and December 31, 2022 are attached.


Pitney Bowes Inc.
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)

	Three months ended June 30,				Six months ended June 30,
		2023		2022		2023		2022
Revenue:
Business services	$	473,497	$	551,478	$	996,988	$	1,148,862
Support services		103,315		107,625		208,599		217,977
Financing		66,702		67,298		133,751		139,327
Equipment sales		79,451		89,986		162,061		179,282
Supplies		36,505		38,245		75,340		79,306
Rentals		17,011		16,863		34,280		33,683
Total revenue		776,481		871,495		1,611,019		1,798,437

Costs and expenses:
Cost of business services		410,638		477,544		856,955		980,759
Cost of support services		35,018		37,711		71,858		74,845
Financing interest expense		14,763		12,533		29,299		24,135
Cost of equipment sales		56,180		63,815		113,351		127,586
Cost of supplies		10,884		11,028		22,109		22,545
Cost of rentals		5,142		7,473		10,570		12,782
Selling, general and administrative		222,549		226,638		464,669		469,423
Research and development		10,274		11,254		20,767		22,588
Restructuring charges		22,443		4,224		26,042		8,408
Goodwill impairment		118,599		-		118,599		-
Interest expense, net		22,920		21,007		45,262		43,131
Other components of net pension and postretirement (income) cost		(1,751)		958		(3,461)		1,802
Other income, net		(228)		-		(3,064)		(11,901)
Total costs and expenses		927,431		874,185		1,772,956		1,776,103

(Loss) income before taxes		(150,950)		(2,690)		(161,937)		22,334
Benefit for income taxes		(9,415)		(7,026)		(12,665)		(2,823)
Net (loss) income	$	(141,535)	$	4,336	$	(149,272)	$	25,157

(Loss) earnings per share:
Basic	$	(0.81)	$	0.02	$	(0.85)	$	0.14
Diluted	$	(0.81)	$	0.02	$	(0.85)	$	0.14

Weighted-average shares used in diluted earnings per share		175,695		176,969		175,094		177,673

(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)

Assets	June 30, 2023		December 31, 2022
Current assets:
Cash and cash equivalents	$	541,704	$	669,981
Short-term investments		18,972		11,172
Accounts and other receivables, net		272,963		343,557
Short-term finance receivables, net		559,979		564,972
Inventories		92,783		83,720
Current income taxes		11,159		8,790
Other current assets and prepayments		117,132		115,824
Total current assets		1,614,692		1,798,016
Property, plant and equipment, net		401,905		420,672
Rental property and equipment, net		25,936		27,487
Long-term finance receivables, net		640,097		627,124
Goodwill		952,302		1,066,951
Intangible assets, net		70,062		77,944
Operating lease assets		284,783		296,129
Noncurrent income taxes		44,859		46,613
Other assets		388,728		380,419
Total assets	$	4,423,364	$	4,741,355

Liabilities and stockholders' (deficit) equity
Current liabilities:
Accounts payable and accrued liabilities	$	812,474	$	907,083
Customer deposits at Pitney Bowes Bank		639,425		628,072
Current operating lease liabilities		53,984		52,576
Current portion of long-term debt		264,980		32,764
Advance billings		82,828		105,207
Current income taxes		2,929		2,101
Total current liabilities		1,856,620		1,727,803
Long-term debt		1,884,798		2,172,502
Deferred taxes on income		236,859		263,131
Tax uncertainties and other income tax liabilities		24,745		23,841
Noncurrent operating lease liabilities		254,051		265,696
Other noncurrent liabilities		241,778		227,729
Total liabilities		4,498,851		4,680,702

Stockholders' (deficit) equity:
Common stock		323,338		323,338
Retained earnings		4,908,641		5,125,677
Accumulated other comprehensive loss		(807,993)		(835,564)
Treasury stock, at cost		(4,499,473)		(4,552,798)
Total stockholders' (deficit) equity		(75,487)		60,653
Total liabilities and stockholders' (deficit) equity	$	4,423,364	$	4,741,355

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

	Three months ended June 30,					Six months ended June 30,
		2023		2022	% Change		2023		2022	% Change

Global Ecommerce
Revenue, as reported	$	312,754	$	393,770	(21%)	$	661,145	$	812,297	(19%)
Impact of change in revenue presentation				(37,790)					(75,376)
Impact of Borderfree divestiture				(10,820)					(22,550)
Comparable revenue before currency		312,754		345,160	(9%)		661,145		714,371	(7%)
Impact of currency on revenue		437					3,278
Comparable revenue	$	313,191	$	345,160	(9%)	$	664,423	$	714,371	(7%)

Presort Services
Revenue, as reported	$	143,107	$	138,934	3%	$	302,009	$	299,478	1%

Sending Technology Solutions
Revenue, as reported	$	320,620	$	338,791	(5%)	$	647,865	$	686,662	(6%)
Impact of change in revenue presentation				(4,853)					(8,543)
Comparable revenue before currency		320,620		333,938	(4%)		647,865		678,119	(4%)
Impact of currency on revenue		725					5,569
Comparable revenue	$	321,345	$	333,938	(4%)	$	653,434	$	678,119	(4%)

Consolidated
Revenue, as reported	$	776,481	$	871,495	(11%)	$	1,611,019	$	1,798,437	(10%)
Impact of change in revenue presentation				(42,643)					(83,919)
Impact of Borderfree divestiture				(10,820)					(22,550)
Comparable revenue before currency		776,481		818,032	(5%)		1,611,019		1,691,968	(5%)
Impact of currency on revenue		1,162					8,847
Comparable revenue	$	777,643	$	818,032	(5%)	$	1,619,866	$	1,691,968	(4%)

Pitney Bowes Inc.
Adjusted Segment EBIT & EBITDA
(Unaudited; in thousands)

	Three months ended June 30,
	2023						2022						% change
	Adjusted Segment EBIT ⁽¹⁾		D&A		Adjusted Segment EBITDA		Adjusted Segment EBIT ⁽¹⁾		D&A		Adjusted Segment EBITDA		Adjusted Segment EBIT	Adjusted Segment EBITDA

Global Ecommerce	$	(38,115)	$	16,620	$	(21,495)	$	(28,825)	$	21,480	$	(7,345)	(32%)	>(100%)
Presort Services		20,429		8,337		28,766		12,851		7,000		19,851	59%	45%
Sending Technology Solutions		97,480		7,383		104,863		95,565		7,908		103,473	2%	1%
Segment total	$	79,794	$	32,340		112,134	$	79,591	$	36,388		115,979	0%	(3%)

Reconciliation of Segment Adjusted EBITDA to Net (Loss) Income:
Segment depreciation and amortization						(32,340)						(36,388)
Unallocated corporate expenses						(47,709)						(40,761)
Restructuring charges						(22,443)						(4,224)
Goodwill impairment						(118,599)						-
Gain on debt redemption						228						-
Proxy solicitation fees						(4,538)						-
Loss on sale of business, including transaction costs						-						(3,756)
Interest, net						(37,683)						(33,540)
Benefit for income taxes						9,415						7,026
Net (loss) income					$	(141,535)					$	4,336



	Six months ended June 30,
	2023						2022						% change
	EBIT (1)		D&A		EBITDA		EBIT (1)		D&A		EBITDA		EBIT	EBITDA

Global Ecommerce	$	(72,321)	$	33,034	$	(39,287)	$	(42,521)	$	42,924	$	403	(70%)	>(100%)
Presort Services		47,334		16,859		64,193		32,483		13,419		45,902	46%	40%
Sending Technology Solutions		194,151		14,850		209,001		200,140		14,911		215,051	(3%)	(3%)
Segment total	$	169,164	$	64,743		233,907	$	190,102	$	71,254		261,356	(11%)	(11%)

Reconciliation of Segment EBITDA to Net (Loss) Income:
Segment depreciation and amortization						(64,743)						(71,254)
Unallocated corporate expenses						(104,058)						(98,595)
Restructuring charges						(26,042)						(8,408)
Goodwill impairment						(118,599)						-
Gain (loss) on debt redemption						3,064						(4,993)
Proxy solicitation fees						(10,905)						-
Gain on sale of assets						-						14,372
Loss on sale of business, including transaction costs						-						(2,878)
Interest, net						(74,561)						(67,266)
Benefit for income taxes						12,665						2,823
Net (loss) income					$	(149,272)					$	25,157

(1) Adjusted segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, goodwill impairment, 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,
		2023		2022		2023		2022

Reconciliation of reported net (loss) income to adjusted EBIT and adjusted EBITDA
Net (loss) income	$	(141,535)	$	4,336	$	(149,272)	$	25,157
Benefit for income taxes		(9,415)		(7,026)		(12,665)		(2,823)
(Loss) income before taxes		(150,950)		(2,690)		(161,937)		22,334
Restructuring charges		22,443		4,224		26,042		8,408
Goodwill impairment		118,599		-		118,599		-
(Gain) loss on debt redemption		(228)		-		(3,064)		4,993
Proxy solicitation fees		4,538		-		10,905		-
Gain on sale of assets		-		-		-		(14,372)
Loss on sale of business, including transaction costs		-		3,756		-		2,878
Adjusted net (loss) income before tax		(5,598)		5,290		(9,455)		24,241
Interest, net		37,683		33,540		74,561		67,266
Adjusted EBIT		32,085		38,830		65,106		91,507
Depreciation and amortization		39,873		43,470		79,770		85,472
Adjusted EBITDA	$	71,958	$	82,300	$	144,876	$	176,979

Reconciliation of reported diluted (loss) earnings per share to adjusted diluted (loss) earnings per share
Diluted (loss) earnings per share	$	(0.81)	$	0.02	$	(0.85)	$	0.14
Restructuring charges		0.09		0.02		0.11		0.03
Goodwill impairment		0.67		-		0.67		-
(Gain) loss on debt redemption		(0.00)		-		(0.01)		0.02
Proxy solicitation fees		0.02		-		0.05		-
Gain on sale of assets		-		-		-		(0.06)
Loss on sale of business, including transaction costs		-		0.02		-		0.00
Tax benefit on sale of business		-		(0.03)		-		(0.03)
Adjusted diluted (loss) earnings per share ⁽¹⁾	$	(0.02)	$	0.02	$	(0.04)	$	0.10

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

Reconciliation of reported net cash from operating activities to free cash flow
Net cash from operating activities	$	(44)	$	35,132	$	(39,758)	$	45,694
Capital expenditures		(25,980)		(31,619)		(54,646)		(64,174)
Restructuring payments		8,242		4,970		12,883		8,255
Proxy solicitation fees paid		7,244		-		10,282		-
Transaction costs paid		-		-		-		2,132
Free cash flow	$	(10,538)	$	8,483	$	(71,239)	$	(8,093)

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Pitney Bowes Announces Second Quarter 2023 Financial Results