STAMFORD, Conn. — (BUSINESS WIRE) — May 4, 2020 — Pitney Bowes Inc. (NYSE: PBI), a global technology company that provides commerce solutions in the areas of ecommerce, shipping, mailing and financial services, today announced its financial results for the first quarter 2020.

“Clearly, we are all operating in unprecedented times and unchartered territory. Our first priority remains around the health, well-being and safety of our workforce, clients, partners and suppliers,” said Marc B. Lautenbach, President and CEO, Pitney Bowes. “Given these challenging times, I am proud of how our team worked together and supported our clients in the first quarter. These actions are consistent with the culture Pitney Bowes has built over the last 100 years and what will carry us into our next 100 years as a Company. Today, thousands of women and men across Pitney Bowes continue to play a critical role in the economy by keeping mail and parcels moving, by keeping our clients’ equipment running, and by keeping our supply chain flowing. I want to acknowledge and thank our employees for the incredible work they each are doing under these difficult circumstances. In the same way, we salute the many selfless Americans that are doing essential work to help our country through this difficult period.”

Lautenbach continued, “It is important to note that businesses engaged in mailing and shipping, which includes Pitney Bowes, have been designated an essential service by the Department of Homeland Security. The sending of mail and parcels is critical to our economy and we understand how vital it is for our clients.”

“Over the last several years, we have made strategic decisions to strengthen our portfolio, products and balance sheet for long-term growth. As a result, we are in a much better position to weather this situation and come out stronger as a Company.”

Financial Overview:

• Revenue of $796 million, flat to prior year; growth of 1 percent when adjusted for the impact of currency and market exits
• GAAP EPS was a loss of $1.22; Adjusted EPS of $0.05
• EPS was negatively impacted by $0.05 as a result of the increase in credit loss provisions to reflect current macro-environment conditions in connection with the application of the current expected credit losses (CECL) accounting standard on January 1, 2020.
• GAAP EPS includes a non-cash $1.15 per share goodwill impairment charge related to the Global Ecommerce business.
• GAAP cash from operations was a use of $66 million; free cash flow was a use of $47 million.
• Based on the uncertainty around Covid-19, the Company is suspending its 2020 annual guidance.

Other Highlights:

• The Company secured a new $850 million five-year Term Loan B; proceeds along with cash on the balance sheet used to pre-pay $928 million in near-term debt maturities.
• The Company’s next bond maturity is not due until October 2021 for $172 million.
• In April, the Company drew down $100 million from its revolving credit facility to hold in reserves. The Company continues to have access to the remaining balance of $400 million and is in compliance with all of its financial covenants contained in the credit facility.
• The Company ended the first quarter with $730 million in cash and short-term investments on its balance sheet and remains confident in its liquidity position.
• The Board of Directors has declared a quarterly cash dividend on the Company’s common stock of $0.05 per share.

First Quarter Results

Revenue totaled $796 million, which was flat to prior year. Revenue grew 1 percent over prior year when adjusted for both the impact of currency and the January 2019 sale of direct operations in 6 smaller European markets (market exits).

GAAP earnings per share was a loss of $1.22, which included a non-cash $1.15 per share goodwill impairment charge related to the Global Ecommerce business, $0.16 for the extinguishment of debt, $0.02 for restructuring charges and a benefit of $0.06 for discontinued operations. Adjusted earnings per share were $0.05.

EPS was negatively impacted by $0.05 as a result of the increase in credit loss provisions to reflect current macro-environment conditions in connection with the application of the current expected credit losses (CECL) accounting standard on January 1, 2020.

GAAP cash from operations was a use of $66 million, which included taxes related to the Software Solutions sale. Free cash flow was a use of $47 million. Compared to prior year, the decline in free cash flow was principally driven by higher accounts payable and accrued liabilities predominantly as a result of timing, in part due to the acceleration of interest payments related to the tender offer completed in the first quarter. Free cash flow versus prior year was also impacted by a lower run-off of finance receivables.

During the quarter, the Company used cash to reduce total debt by $110 million, paid $30 million as a premium payment to redeem debt, invested $26 million in capital expenditures, paid $9 million in dividends to its common shareholders and made $6 million in restructuring payments.

Earnings per share results for the first quarter are summarized in the table below: