Pitney Bowes Announces Full Year and Fourth Quarter 2021 Financial Results

Rhea-AI Summary

Pitney Bowes (NYSE: PBI) reported its full year and fourth quarter 2021 financial results, achieving consolidated revenue growth for the fifth consecutive year. Full year revenue was $3.7 billion, a 3% increase, with an adjusted EPS of $0.32. While Global Ecommerce outperformed with a 5% revenue growth, challenges such as lower volumes impacted the fourth quarter results, which saw a 4% revenue decline to $984 million. The company ended 2021 with $747 million in cash and reduced debt by $241 million. Looking ahead, Pitney Bowes expects low-to-mid single digit revenue growth in 2022.

Positive

• Fifth consecutive year of revenue growth, reaching $3.7 billion in 2021 (+3%).
• Global Ecommerce revenue increased 5% year-over-year; 48% growth compared to 2019.
• Presort Services revenue up 10% year-over-year with EBIT margin at 14%.
• Cash from operations was $302 million, with free cash flow at $154 million.
• Reduced debt by $241 million, improving financial stability.

Negative

• Fourth quarter revenue declined 4% to $984 million.
• Global Ecommerce revenue fell by 9% in Q4 2021 compared to Q4 2020.
• SendTech revenue decreased 6% year-over-year in Q4 2021.
• Lower volumes led to decreased EBITDA and EBIT in Global Ecommerce.

STAMFORD, Conn.--(BUSINESS WIRE)-- 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.

Pitney Bowes Inc.
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)
			Three months ended December 31,								Twelve months ended December 31,
				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.

Pitney Bowes Inc.
Consolidated Balance Sheets
(Unaudited; in thousands)
Assets			December 31, 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

Pitney Bowes Inc.
Business Segment Revenue
(Unaudited; in thousands)
				Three months ended December 31,										Twelve months ended December 31,
					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	%

Pitney Bowes Inc.
Business Segment EBIT & EBITDA
(Unaudited; in thousands)
	Three months ended December 31,
	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.

 

Pitney Bowes Inc.
Reconciliation of Reported Consolidated Results to Adjusted Results
(Unaudited; in thousands, except per share amounts)
		Three months ended December 31,								Twelve months ended December 31,
			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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220131005841/en/

Editorial -

Bill Hughes

Chief Communications Officer

203/351-6785



Financial -

Ned Zachar, CFA

VP, Investor Relations

203/614-1092

Source: Pitney Bowes Inc.

FAQ

What were Pitney Bowes' earnings for Q4 2021?

For Q4 2021, Pitney Bowes reported a GAAP EPS of $0.01 and an adjusted EPS of $0.06.

What is the revenue outlook for Pitney Bowes in 2022?

Pitney Bowes expects annual revenue and EBIT growth in the low-to-mid single digit range for 2022.

How did Pitney Bowes perform in Global Ecommerce in 2021?

Global Ecommerce achieved $1.7 billion in revenue for 2021, representing a 5% year-over-year increase.

What were the full year financial results for Pitney Bowes in 2021?

Pitney Bowes reported full year revenue of $3.7 billion, a 3% increase, with adjusted EPS of $0.32.

What challenges did Pitney Bowes face in Q4 2021?

In Q4 2021, Pitney Bowes faced challenges including lower volumes in Global Ecommerce, leading to a 4% decline in overall revenue.