STAMFORD, Conn. — (BUSINESS WIRE) — February 2, 2016 — Pitney Bowes Inc. (NYSE: PBI), a global technology company that provides products and solutions that power commerce, today reported financial results for the full year and the fourth quarter 2015. The Company also provided annual guidance for 2016.
Full-Year 2015:
- Revenue of $3.6 billion, a decline of 3 percent on a constant currency basis and 6 percent on a reported basis
- Adjusted EPS of $1.75; GAAP EPS of $2.03. EPS includes a $0.07 per share negative impact of foreign exchange during the year.
- SG&A expenses of $1.3 billion, a reduction of $98 million year-over-year
- Free cash flow of $456 million; GAAP cash from operations of $515 million
- Repurchased $135 million of common stock; reduced debt by $280 million and refinanced $110 million of debt
Fourth Quarter 2015:
- Revenue of $937 million, a decline of 2 percent on a constant currency basis and 5 percent on a reported basis
- Adjusted EPS of $0.48; GAAP EPS of $0.44. EPS includes a $0.02 per share negative impact of foreign exchange during the quarter.
- SG&A expenses of $341 million, a reduction of $6 million
- Free cash flow of $157 million; GAAP cash from operations of $164 million
- Repurchased $35 million of common stock and refinanced $110 million of debt using funds from a $150 million bank term loan
“We made substantial progress against our strategic objectives in 2015 and entered 2016 in a stronger position," said Marc B. Lautenbach, President and CEO, Pitney Bowes. “In the fourth quarter, most of our businesses performed in-line with our long term expectations; however, our Software business fell short of what we had expected. As we look forward, we continue to feel good about where we are in our transformation and our ability to deliver long term value to our shareholders.”
FULL YEAR 2015 RESULTS
For the full year, revenue totaled $3.6 billion, a decline of 3 percent on a constant currency basis and 6 percent on a reported basis when compared to the prior year. As part of its previously announced go-to-market strategy, in 2014 the Company exited a non-core product line in Norway and transitioned from a direct sales model to a dealer sales network in six smaller European markets for the International Mailing and Production Mail segments. For comparative purposes, revenue for 2015 would have declined 2 percent on a constant currency basis when revenue in the current and prior years is adjusted for the impact of these divested revenues.
On a Generally Accepted Accounting Principles (GAAP) basis, earnings per diluted share were $2.03.
Adjusted earnings per diluted share from continuing operations were $1.75 and exclude:
- $0.32 which includes a gain from the sale of Imagitas of $0.44 and net acquisition and disposition related expenses of $0.12;
- $0.09 of restructuring and asset impairment charges;
- $0.02 of legal settlement expense;
- $0.04 benefit related to a previous investment divestiture;
- $0.03 of income from discontinued operations.
Earnings per share for the year were reduced by $0.07 due to the impacts of foreign exchange. Additionally, adjusted earnings per share were adversely impacted by the 33.5 percent tax rate, which was at the high-end of the Company’s guidance range primarily due to a greater percentage of U.S. sourced income.
Free cash flow for the year was $456 million and the Company generated $515 million of cash from operations on a GAAP basis. In addition to investing in the business, the Company used the cash to pay $150 million in dividends to its common shareholders; repurchase $135 million worth of its common stock and make $62 million in restructuring payments during the year. In comparison to the prior year, free cash flow was lower primarily due to the timing of working capital requirements.
FOURTH QUARTER 2015 RESULTS
Revenue totaled $937 million, a decline of 2 percent on a constant currency basis and 5 percent on a reported basis when compared to the prior year.
Revenue benefited from 14 percent growth on a constant currency basis and 11 percent growth on a reported basis in the Digital Commerce Solutions group, driven by growth in Global Ecommerce offset partially by lower results in the Software segment.
Revenue in the Enterprise Business Solutions group grew 1 percent on a constant currency basis and declined 2 percent on a reported basis. This resulted from continued growth in Presort Services offset by a decline in Production Mail.
In the Small and Medium Business (SMB) Solutions group, revenue declined 3 percent on a constant currency basis and 6 percent on a reported basis. North America Mailing had a decline of only one percent for equipment sales in the U.S. compared to the prior year. Total revenue for International Mailing had the lowest rate of decline on a constant currency basis since the implementation of the new go-to-market strategy.
On a GAAP basis, earnings per diluted share were $0.44 for the fourth quarter.
Adjusted earnings per diluted share from continuing operations were $0.48 and exclude:
- $0.02 of expenses related to the exit of certain geographic markets during the quarter;
- $0.05 for restructuring charges and asset impairments;
- $0.03 of income from discontinued operations.
Earnings per share this quarter were reduced by $0.02 due to the impacts of foreign exchange.
Free cash flow during the quarter was $157 million, which was similar to the prior year. The Company generated $164 million of cash from operations on a GAAP basis. The Company used the cash to pay $37 million in dividends to its common shareholders; repurchase $35 million worth of its common stock and make $16 million in restructuring payments.
The Company’s results for the quarter and full year are summarized in the table below:
($ millions, except EPS) | Fourth Quarter | Full Year | ||||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||||
Revenue | $937 | $984 | $3,578 | $3,822 | ||||||||||
Adjusted EPS from continuing operations |
$0.48 | $0.51 | $1.75 | $1.90 | ||||||||||
Gain on sale of Imagitas and net acquisition
and disposition related expenses |
($0.02) |
- |
$0.32 |
- |
||||||||||
Restructuring charges and asset impairments | ($0.05) | ($0.22) | ($0.09) | ($0.29) | ||||||||||
Legal settlement | - |
- |
($0.02) |
- |
||||||||||
Investment divestiture | - | - | $0.04 | $0.05 | ||||||||||
Extinguishment of debt | - | - | - | ($0.19) | ||||||||||
GAAP EPS from continuing operations | $0.41 | $0.29 | $2.00 | $1.47 | ||||||||||
Discontinued operations – income | $0.03 | $0.02 | $0.03 | $0.17 | ||||||||||
GAAP EPS | $0.44 | $0.31 | $2.03 | $1.64 | ||||||||||
Free Cash Flow |
$157 | $154 | $456 | $571 | ||||||||||
* The sum of the earnings per share may not equal the totals above due to rounding.
DEBT MANAGEMENT
During the year, the Company paid down $280 million of debt using cash on the balance sheet and the issuance of commercial paper. In the fourth quarter, the Company used funds from a new $150 million bank term loan to refinance $110 million of debt. In January 2016, the Company obtained an additional $300 million of bank term loans and refinanced $371 million of debt that matured in January.
BUSINESS SEGMENT REPORTING
The Company revised its business segment reporting in the second quarter 2015 for its Digital Commerce Solutions segment. The Company’s business segment reporting reflects the clients served in each market and the way it manages these segments for growth and profitability. The primary reporting segment groups are the SMB Solutions group; the Enterprise Business Solutions group; and the Digital Commerce Solutions group.
The SMB Solutions group offers mailing equipment, financing, services and supplies for small and medium businesses to efficiently create mail and evidence postage. This group includes the North America Mailing and International Mailing segments. North America Mailing includes the operations of U.S. and Canada Mailing. International Mailing includes all other SMB operations around the world.
The Enterprise Business Solutions group provides mailing and printing equipment and services for large enterprise clients to process mail, including sortation services to qualify large mail volumes for postal worksharing discounts. This group includes the global Production Mail and Presort Services segments.
The Digital Commerce Solutions group provides customer engagement, customer information and location intelligence software; and solutions that facilitate global cross-border ecommerce transactions and shipping solutions for businesses of all sizes. This group includes the Software Solutions and Global Ecommerce segments.
The Other segment is comprised of the Imagitas marketing services business, which was sold on May 29, 2015.
SMB Solutions Group |
||||||||||||||
(millions, except percentages) | Fourth Quarter | |||||||||||||
Revenue |
2015 |
2014 |
Y/Y Reported |
Y/Y Ex Currency |
||||||||||
North America Mailing | $363 | $376 | (3%) | (2%) | ||||||||||
International Mailing |
114 |
134 |
(15%) |
(6%) |
||||||||||
SMB Solutions Total | $477 | $510 | (6%) | (3%) | ||||||||||
EBIT |
||||||||||||||
North America Mailing | $165 | $166 | (1%) | |||||||||||
International Mailing |
14 |
21 |
(32%) |
|||||||||||
SMB Solutions Total | $179 | $187 | (4%) | |||||||||||
North America Mailing
Revenue declined on a constant currency basis at a lesser rate than through the first nine months of the year. In the U.S., equipment sales declined one percent versus the prior year while recurring revenue streams continued to perform in-line with prior quarters. EBIT margin improved versus the prior year due to the mix of business and lower employee-related costs.
International Mailing
Revenue declined at its lowest rate all year, benefiting from improved equipment sales trends in most of the major markets where the Company has completed the shift in its go-to-market strategy. Equipment sales revenue grew on a constant currency basis, driven in part by increased sales in the UK. In France, equipment sales declined at a lesser rate than in previous quarters as the new sales structure increased productivity. However, equipment sales growth was offset by a decline in the recurring revenue streams. During the quarter, the Company sold, or entered into agreements to sell assets and convert to a dealer model in Mexico, South Africa and five markets in Asia.
International Mailing’s EBIT margin declined versus the prior year due to the impact of currency on costs and reduced, higher-margin recurring stream revenue.
Enterprise Business Solutions Group |
||||||||||||||
(millions, except percentages) | Fourth Quarter | |||||||||||||
Revenue |
2015 |
2014 |
Y/Y Reported |
Y/Y Ex Currency |
||||||||||
Production Mail | $122 | $132 | (7%) | (3%) | ||||||||||
Presort Services |
122 |
117 |
4% |
4% |
||||||||||
Enterprise Business Total | $245 | $249 | (2%) | 1% | ||||||||||
EBIT |
||||||||||||||
Production Mail | $17 | $20 | (15%) | |||||||||||
Presort Services |
28 |
30 |
(8%) |
|||||||||||
Enterprise Business Total | $45 | $50 | (10%) | |||||||||||
Production Mail
Revenue trends improved versus the prior two quarters and benefited from growth in inserting equipment sales, driven in part by the new Epic™ product line, and higher supplies revenue. Revenue was adversely impacted by fewer printer installations than the prior year. EBIT margin declined versus the prior year due to product mix and increased engineering investments.
Presort Services
Revenue benefited from higher volumes of First Class and Standard mail processed versus the prior year, as well as new client acquisitions. EBIT margin declined versus the prior year due in part to investments made to expand the network into two new U.S. markets.
Digital Commerce Solutions Group |
||||||||||||||
(millions, except percentages) | Fourth Quarter | |||||||||||||
Revenue |
2015 |
2014 |
Y/Y Reported |
Y/Y Ex Currency |
||||||||||
Software Solutions | $103 | $116 | (12%) | (7%) | ||||||||||
Global Ecommerce |
112 |
77 |
45% |
46% |
||||||||||
Digital Commerce Total | $215 | $194 | 11% | 14% | ||||||||||
EBIT |
||||||||||||||
Software Solutions | $14 | $21 | (34%) | |||||||||||
Global Ecommerce |
9 |
8 |
23% |
|||||||||||
Digital Commerce Total | $23 | $28 | (19%) | |||||||||||
Software Solutions
Revenue declined due to lower licensing revenues in the Americas and Europe. The Company has allocated additional resources to expand its channel reach and focus on several high-potential industries and solutions. EBIT margin declined as a result of the lower amount of licensing revenue, which has a high margin.
Global Ecommerce
Results included a full quarter of revenue from Borderfree and growth in UK marketplace revenue. A number of new retail clients and expanded payment options also added to revenue in the quarter. However, outbound package shipments from the U.S. continued to be pressured by the strong U.S. dollar. This was especially true with regard to the Canadian and Australian dollars, which both declined in value by 15 percent versus the U.S. currency in comparison to the prior year. These markets represent two of the top three markets for volume shipped from the U.S.
EBIT margin declined versus the prior year due to the amortization of acquisition-related intangible assets, which offset the early stages of synergy savings.
Other |
||||||||||||||
($ millions) | Fourth Quarter | |||||||||||||
2015 |
2014 |
Y/Y Reported |
Y/Y Ex Currency |
|||||||||||
Revenue | $0 | $31 | NM | NM | ||||||||||
EBIT |
$0 | $5 | NM | |||||||||||
The Other segment is comprised of the Imagitas marketing services business, which was sold in May 2015.
2016 GUIDANCE
This guidance discusses future results, which are inherently subject to unforeseen risks and developments. As such, discussions about the business outlook should be read in the context of an uncertain future, as well as the risk factors identified in the safe harbor language at the end of this release and as more fully outlined in the Company's 2014 Form 10-K Annual Report and other reports filed with the Securities and Exchange Commission.
This guidance excludes any unusual items that may occur or additional portfolio or restructuring actions, not specifically identified, as the Company implements plans to further streamline its operations and reduce costs. This guidance also assumes that the global economy and foreign exchange markets in 2016 will not change significantly from year-end 2015 levels. Volatility in the foreign exchange markets could have a material effect on the Company’s reported results compared to guidance. From a sensitivity perspective, for each 5 percent movement of the exchange rates material to the Company’s business, reported revenue growth could be impacted by an approximately 150 basis point change and adjusted earnings per share could be impacted by about $0.03 per share.
The Company expects in 2016:
- Revenue, excluding the impacts of currency; to be driven by growth in the double-digit range in Digital Commerce Solutions; flat to modest growth in Enterprise Business Solutions and a low single-digit decline in SMB Solutions.
-
Revenue is expected to benefit from:
- the completion of the go-to-market shift in the Company’s major markets;
- new product launches across the portfolio;
- recent acquisitions, including Borderfree, Real Time Content (RTC) and Enroute Systems Corporation;
- the addition of new brands and retailers in ecommerce;
- the expansion of the Company’s Presort Services network.
- Ongoing improvement in SG&A as a percent of revenue as a result of the expected benefits from the implementation of the new ERP program. The majority of these benefits in 2016 are expected to be realized in the second half of the year, after the U.S. launch and stabilization period.
- Incremental Marketing expense related to the Company’s new advertising campaign that is expected to be the highest in the first and fourth quarters.
- A tax rate in the range of 32 to 35 percent.
Based on the above assumptions, the Company’s 2016 guidance is as follows:
- Revenue, on a constant currency basis, is expected to be in the range of a 1 percent decline to 2 percent growth when compared to 2015.
- Earnings per diluted share from continuing operations to be in the range of $1.80 to $2.00 on both an adjusted and GAAP basis. This guidance does not anticipate any potential adjustments to earnings.
- Free cash flow to be in the range of $425 million to $525 million.
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.pb.com.
About Pitney Bowes
Pitney Bowes (NYSE: PBI) is a global technology company offering innovative products and solutions that enable commerce in the areas of customer information management, location intelligence, customer engagement, shipping and mailing, and global ecommerce. More than 1.5 million clients in approximately 100 countries around the world rely on products, solutions and services from Pitney Bowes. For additional information, visit Pitney Bowes at www.pitneybowes.com.
The Company's financial results are reported in accordance with generally accepted accounting principles (GAAP). The Company uses measures such as adjusted earnings before interest and taxes (EBIT), adjusted earnings per share, adjusted income from continuing operations and free cash flow to exclude the impact of special items like restructuring charges, tax adjustments, and goodwill and asset write-downs, because, while these are actual Company expenses, they can mask underlying trends associated with its business. Such items are often inconsistent in amount and frequency and as such, the adjustments allow an investor greater insight into the current underlying operating trends of the business.
The use of free cash flow provides investors insight into the amount of cash that management could have available for other discretionary uses. It adjusts GAAP cash from operations for capital expenditures, as well as special items like cash used for restructuring charges, unusual tax settlements or payments and contributions to its pension funds. Management uses segment EBIT to measure profitability and performance at the segment level. Segment EBIT is determined by deducting from revenue the related costs and expenses attributable to the segment. Segment EBIT excludes interest, taxes, general corporate expenses not allocated to a particular business segment, restructuring charges and goodwill and asset impairments, which are recognized on a consolidated basis. 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 measures are intended to help investors better understand the underlying operational performance of the business excluding the impacts of shifts in currency exchange rates over the period.
Pitney Bowes has provided a quantitative reconciliation to GAAP in supplemental schedules. This information may also be found at the Company's web site 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 its future revenue and earnings guidance and other statements about 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. These risks and uncertainties include, but are not limited to: mail volumes; the uncertain economic environment; timely development, market acceptance and regulatory approvals, if needed, of new products; fluctuations in customer demand; changes in postal regulations; interrupted use of key information systems; management of outsourcing arrangements; the implementation of a new enterprise resource planning system; changes in business portfolio; the success of our investment in rebranding the Company; the risk of customer concentration in our Digital Commerce Solutions group; integrating newly acquired businesses, including operations and product and service offerings; foreign currency exchange rates; changes in our credit ratings; management of credit risk; changes in interest rates; the financial health of national posts; and other factors beyond its control as more fully outlined in the Company's 2014 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 and EBIT by business segment; and reconciliation of GAAP to non-GAAP measures for the three months and twelve months ended December 31, 2015 and 2014, and consolidated balance sheets at December 31, 2015 and 2014 are attached.
Pitney Bowes Inc. | ||||||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||||||
(Unaudited; in thousands, except per share data) |
||||||||||||||||||||
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Revenue: | ||||||||||||||||||||
Equipment sales | $ | 199,831 | $ | 212,339 | $ | 695,159 | $ | 770,371 | ||||||||||||
Supplies | 72,925 | 71,691 | 288,103 | 300,040 | ||||||||||||||||
Software | 103,265 | 116,852 | 386,506 | 429,743 | ||||||||||||||||
Rentals | 107,934 | 119,560 | 441,663 | 484,629 | ||||||||||||||||
Financing | 103,043 | 107,330 | 410,035 | 432,859 | ||||||||||||||||
Support services | 139,149 | 154,372 | 554,764 | 625,135 | ||||||||||||||||
Business services | 210,800 | 201,769 | 801,830 | 778,727 | ||||||||||||||||
Total revenue | 936,947 | 983,913 | 3,578,060 | 3,821,504 | ||||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of equipment sales | 98,363 | 103,388 | 331,069 | 365,724 | ||||||||||||||||
Cost of supplies | 22,890 | 23,546 | 88,802 | 93,675 | ||||||||||||||||
Cost of software | 27,996 | 30,337 | 113,580 | 123,760 | ||||||||||||||||
Cost of rentals | 21,061 | 23,065 | 84,188 | 97,338 | ||||||||||||||||
Financing interest expense | 17,620 | 18,829 | 71,791 | 78,562 | ||||||||||||||||
Cost of support services | 78,107 | 88,800 | 322,960 | 377,003 | ||||||||||||||||
Cost of business services | 140,642 | 138,257 | 546,201 | 544,729 | ||||||||||||||||
Selling, general and administrative | 340,643 | 346,903 | 1,279,961 | 1,378,400 | ||||||||||||||||
Research and development | 26,463 | 29,030 | 110,156 | 109,931 | ||||||||||||||||
Restructuring charges and asset impairments, net | 11,477 | 61,894 | 25,782 | 84,560 | ||||||||||||||||
Interest expense, net | 22,383 | 23,184 | 87,583 | 90,888 | ||||||||||||||||
Other expense (income), net | 78 | - | (94,838 | ) | 45,738 | |||||||||||||||
Total costs and expenses | 807,723 | 887,233 | 2,967,235 | 3,390,308 | ||||||||||||||||
Income from continuing operations before income taxes | 129,224 | 96,680 | 610,825 | 431,196 | ||||||||||||||||
Provision for income taxes | 44,204 | 33,134 | 189,778 | 112,815 | ||||||||||||||||
Income from continuing operations | 85,020 | 63,546 | 421,047 | 318,381 | ||||||||||||||||
Income from discontinued operations, net of tax | 5,853 | 3,576 | 5,271 | 33,749 | ||||||||||||||||
Net income before attribution of noncontrolling interests | 90,873 | 67,122 | 426,318 | 352,130 | ||||||||||||||||
Less: Preferred stock dividends of subsidiaries attributable | ||||||||||||||||||||
to noncontrolling interests | 4,594 | 4,594 | 18,375 | 18,375 | ||||||||||||||||
Net income - Pitney Bowes Inc. | $ | 86,279 | $ | 62,528 | $ | 407,943 | $ | 333,755 | ||||||||||||
Amounts attributable to common stockholders: | ||||||||||||||||||||
Income from continuing operations | $ | 80,426 | $ | 58,952 | $ | 402,672 | $ | 300,006 | ||||||||||||
Income from discontinued operations, net of tax | 5,853 | 3,576 | 5,271 | 33,749 | ||||||||||||||||
Net income - Pitney Bowes Inc. | $ | 86,279 | $ | 62,528 | $ | 407,943 | $ | 333,755 | ||||||||||||
Basic earnings per share attributable to common stockholders (1): | ||||||||||||||||||||
Continuing operations | $ | 0.41 | $ | 0.29 | $ | 2.01 | $ | 1.49 | ||||||||||||
Discontinued operations | 0.03 | 0.02 | 0.03 | 0.17 | ||||||||||||||||
Net income - Pitney Bowes Inc. | $ | 0.44 | $ | 0.31 | $ | 2.04 | $ | 1.65 | ||||||||||||
Diluted earnings per share attributable to common stockholders (1): | ||||||||||||||||||||
Continuing operations | $ | 0.41 | $ | 0.29 | $ | 2.00 | $ | 1.47 | ||||||||||||
Discontinued operations | 0.03 | 0.02 | 0.03 | 0.17 | ||||||||||||||||
Net income - Pitney Bowes Inc. | $ | 0.44 | $ | 0.31 | $ | 2.03 | $ | 1.64 | ||||||||||||
Weighted-average shares used in diluted EPS | 197,959,779 | 203,110,509 | 200,944,874 | 203,961,446 | ||||||||||||||||
(1)The sum of the earnings per share amounts may not equal the totals due to rounding. |
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Pitney Bowes Inc. | |||||||||||||
Consolidated Balance Sheets | |||||||||||||
(Unaudited; in thousands, except per share data) |
|||||||||||||
Assets |
December 31,
2015 |
December 31,
2014 (1) |
|||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 677,431 | $ | 1,079,145 | |||||||||
Short-term investments | 102,122 | 32,121 | |||||||||||
Accounts receivable, gross | 466,589 | 448,017 | |||||||||||
Allowance for doubtful accounts | (9,262 | ) | (10,742 | ) | |||||||||
Accounts receivable, net | 457,327 | 437,275 | |||||||||||
Short-term finance receivables | 950,684 | 1,019,412 | |||||||||||
Allowance for credit losses | (15,514 | ) | (19,108 | ) | |||||||||
Short-term finance receivables, net | 935,170 | 1,000,304 | |||||||||||
Inventories | 88,824 | 84,827 | |||||||||||
Current income taxes | 6,584 | 28,584 | |||||||||||
Other current assets and prepayments | 64,325 | 57,173 | |||||||||||
Assets held for sale | - | 52,271 | |||||||||||
Total current assets | 2,331,783 | 2,771,700 | |||||||||||
Property, plant and equipment, net | 330,088 | 285,091 | |||||||||||
Rental property and equipment, net | 180,662 | 200,380 | |||||||||||
Long-term finance receivables | 769,303 | 828,723 | |||||||||||
Allowance for credit losses | (6,249 | ) | (9,002 | ) | |||||||||
Long-term finance receivables, net | 763,054 | 819,721 | |||||||||||
Goodwill | 1,745,957 | 1,672,721 | |||||||||||
Intangible assets, net | 187,378 | 82,173 | |||||||||||
Non-current income taxes | 70,294 | 98,806 | |||||||||||
Other assets | 532,245 | 569,110 | |||||||||||
Total assets | $ | 6,141,461 | $ | 6,499,702 | |||||||||
Liabilities, noncontrolling interests and stockholders' equity |
|||||||||||||
Current liabilities: | |||||||||||||
Accounts payable and accrued liabilities | $ | 1,457,614 | $ | 1,572,971 | |||||||||
Current income taxes | 16,620 | 30,527 | |||||||||||
Current portion of long-term debt and notes payable | 461,085 | 324,879 | |||||||||||
Advance billings | 353,025 | 386,846 | |||||||||||
Total current liabilities | 2,288,344 | 2,315,223 | |||||||||||
Deferred taxes on income | 205,668 | 114,950 | |||||||||||
Tax uncertainties and other income tax liabilities | 68,429 | 86,127 | |||||||||||
Long-term debt | 2,507,912 | 2,927,127 | |||||||||||
Other non-current liabilities | 596,017 | 682,646 | |||||||||||
Total liabilities | 5,666,370 | 6,126,073 | |||||||||||
Noncontrolling interests (Preferred stockholders' equity in subsidiaries) | 296,370 | 296,370 | |||||||||||
Stockholders' equity: | |||||||||||||
Cumulative preferred stock, $50 par value, 4% convertible | 1 | 1 | |||||||||||
Cumulative preference stock, no par value, $2.12 convertible | 505 | 548 | |||||||||||
Common stock, $1 par value | 323,338 | 323,338 | |||||||||||
Additional paid-in-capital | 161,280 | 178,852 | |||||||||||
Retained earnings | 5,155,537 | 4,897,708 | |||||||||||
Accumulated other comprehensive loss | (888,635 | ) | (846,156 | ) | |||||||||
Treasury stock, at cost | (4,573,305 | ) | (4,477,032 | ) | |||||||||
Total Pitney Bowes Inc. stockholders' equity | 178,721 | 77,259 | |||||||||||
Total liabilities, noncontrolling interests and stockholders' equity | $ | 6,141,461 | $ | 6,499,702 | |||||||||
(1)Certain prior year amounts have been revised. |
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Pitney Bowes Inc. | ||||||||||||||||||
Revenue and EBIT | ||||||||||||||||||
Business Segments | ||||||||||||||||||
(Unaudited; in thousands) |
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Three Months Ended December 31, | ||||||||||||||||||
% | ||||||||||||||||||
2015 | 2014 | Change | ||||||||||||||||
Revenue |
||||||||||||||||||
North America Mailing | $ | 363,316 | $ | 376,421 | (3 | %) | ||||||||||||
International Mailing | 113,930 | 133,621 | (15 | %) | ||||||||||||||
Small & Medium Business Solutions | 477,246 | 510,042 | (6 | %) | ||||||||||||||
Production Mail | 122,298 | 131,730 | (7 | %) | ||||||||||||||
Presort Services | 122,247 | 117,350 | 4 | % | ||||||||||||||
Enterprise Business Solutions | 244,545 | 249,080 | (2 | %) | ||||||||||||||
Software Solutions | 102,992 | 116,462 | (12 | %) | ||||||||||||||
Global Ecommerce | 112,164 | 77,244 | 45 | % | ||||||||||||||
Digital Commerce Solutions | 215,156 | 193,706 | 11 | % | ||||||||||||||
Other | - | 31,085 | (100 | %) | ||||||||||||||
Total revenue | $ | 936,947 | $ | 983,913 | (5 | %) | ||||||||||||
EBIT (1) |
||||||||||||||||||
North America Mailing | $ | 164,537 | $ | 165,764 | (1 | %) | ||||||||||||
International Mailing | 14,485 | 21,363 | (32 | %) | ||||||||||||||
Small & Medium Business Solutions | 179,022 | 187,127 | (4 | %) | ||||||||||||||
Production Mail | 16,793 | 19,678 | (15 | %) | ||||||||||||||
Presort Services | 27,709 | 29,995 | (8 | %) | ||||||||||||||
Enterprise Business Solutions | 44,502 | 49,673 | (10 | %) | ||||||||||||||
Software Solutions | 13,627 | 20,573 | (34 | %) | ||||||||||||||
Global Ecommerce | 9,267 | 7,533 | 23 | % | ||||||||||||||
Digital Commerce Solutions | 22,894 | 28,106 | (19 | %) | ||||||||||||||
Other | - | 5,275 | (100 | %) | ||||||||||||||
Total EBIT | 246,418 | 270,181 | (9 | %) | ||||||||||||||
Unallocated amounts: | ||||||||||||||||||
Interest, net (2) | (40,003 | ) | (42,013 | ) | ||||||||||||||
Corporate and other expenses | (61,136 | ) | (69,594 | ) | ||||||||||||||
Restructuring charges and asset impairments, net | (11,477 | ) | (61,894 | ) | ||||||||||||||
Other expense, net | (78 | ) | - | |||||||||||||||
Acquisition/disposition related expenses | (4,500 | ) | - | |||||||||||||||
Income from continuing operations before income taxes | $ | 129,224 | $ | 96,680 | ||||||||||||||
(1) | Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges and other items, which are not allocated to a particular business segment. |
(2) | Includes financing interest expense and interest expense, net. |
Pitney Bowes Inc. | |||||||||||||||||
Revenue and EBIT | |||||||||||||||||
Business Segments | |||||||||||||||||
(Unaudited; in thousands) |
|||||||||||||||||
Twelve Months Ended December 31, | |||||||||||||||||
% | |||||||||||||||||
2015 | 2014 | Change | |||||||||||||||
Revenue |
|||||||||||||||||
North America Mailing | $ | 1,435,140 | $ | 1,491,927 | (4 | %) | |||||||||||
International Mailing | 445,328 | 572,440 | (22 | %) | |||||||||||||
Small & Medium Business Solutions | 1,880,468 | 2,064,367 | (9 | %) | |||||||||||||
Production Mail | 421,178 | 462,199 | (9 | %) | |||||||||||||
Presort Services | 473,612 | 456,556 | 4 | % | |||||||||||||
Enterprise Business Solutions | 894,790 | 918,755 | (3 | %) | |||||||||||||
Software Solutions | 385,908 | 428,662 | (10 | %) | |||||||||||||
Global Ecommerce | 362,087 | 281,643 | 29 | % | |||||||||||||
Digital Commerce Solutions | 747,995 | 710,305 | 5 | % | |||||||||||||
Other | 54,807 | 128,077 | (57 | %) | |||||||||||||
Total revenue | $ | 3,578,060 | $ | 3,821,504 | (6 | %) | |||||||||||
EBIT (1) |
|||||||||||||||||
North America Mailing | $ | 646,913 | $ | 642,521 | 1 | % | |||||||||||
International Mailing | 51,070 | 88,710 | (42 | %) | |||||||||||||
Small & Medium Business Solutions | 697,983 | 731,231 | (5 | %) | |||||||||||||
Production Mail | 48,254 | 47,543 | 1 | % | |||||||||||||
Presort Services | 104,655 | 98,230 | 7 | % | |||||||||||||
Enterprise Business Solutions | 152,909 | 145,773 | 5 | % | |||||||||||||
Software Solutions | 48,531 | 51,193 | (5 | %) | |||||||||||||
Global Ecommerce | 19,229 | 16,633 | 16 | % | |||||||||||||
Digital Commerce Solutions | 67,760 | 67,826 | (0 | %) | |||||||||||||
Other | 10,569 | 19,240 | (45 | %) | |||||||||||||
Total EBIT | 929,221 | 964,070 | (4 | %) | |||||||||||||
Unallocated amounts: | |||||||||||||||||
Interest, net (2) | (159,374 | ) | (169,450 | ) | |||||||||||||
Corporate and other expenses | (213,095 | ) | (233,126 | ) | |||||||||||||
Restructuring charges and asset impairments, net | (25,782 | ) | (84,560 | ) | |||||||||||||
Other income (expense), net | 94,838 | (45,738 | ) | ||||||||||||||
Acquisition/disposition related expenses | (14,983 | ) | - | ||||||||||||||
Income from continuing operations before income taxes | $ | 610,825 | $ | 431,196 | |||||||||||||
(1) | Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges and other items, which are not allocated to a particular business segment. |
(2) | Includes financing interest expense and interest expense, net. |
Pitney Bowes Inc. | |||||||||||||||||||||||||||
Reconciliation of Reported Consolidated Results to Adjusted Results | |||||||||||||||||||||||||||
(Unaudited; in thousands, except per share data) | |||||||||||||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||||
Income from continuing operations | |||||||||||||||||||||||||||
after income taxes, as reported: | $ | 80,426 | $ | 58,952 | $ | 402,672 | $ | 300,006 | |||||||||||||||||||
Restructuring charges and asset impairments, net | 9,481 | 44,188 | 18,089 | 59,349 | |||||||||||||||||||||||
Loss (gain) on sale/disposition of businesses | 4,149 | - | (84,250 | ) | - | ||||||||||||||||||||||
Acquisition and disposition transaction costs | 48 | - | 11,475 | - | |||||||||||||||||||||||
Legal settlement | - | - | 4,250 | - | |||||||||||||||||||||||
Acquisition related compensation expense | - | - | 7,246 | - | |||||||||||||||||||||||
Investment divestiture | - | - | (7,756 | ) | (9,774 | ) | |||||||||||||||||||||
Extinguishment of debt | - | - | - | 37,833 | |||||||||||||||||||||||
Income from continuing operations | |||||||||||||||||||||||||||
after income taxes, as adjusted: | $ | 94,104 | $ | 103,140 | $ | 351,726 | $ | 387,414 | |||||||||||||||||||
Diluted earnings per share from | |||||||||||||||||||||||||||
continuing operations, as reported: | $ | 0.41 | $ | 0.29 | $ | 2.00 | $ | 1.47 | |||||||||||||||||||
Restructuring charges and asset impairments, net | 0.05 | 0.22 | 0.09 | 0.29 | |||||||||||||||||||||||
Loss (gain) on sale/disposition of businesses | 0.02 | - | (0.42 | ) | - | ||||||||||||||||||||||
Acquisition and disposition transaction costs | - | - | 0.06 | - | |||||||||||||||||||||||
Legal settlement | - | - | 0.02 | - | |||||||||||||||||||||||
Acquisition related compensation expense | - | - | 0.04 | - | |||||||||||||||||||||||
Investment divestiture | - | - | (0.04 | ) | (0.05 | ) | |||||||||||||||||||||
Extinguishment of debt | - | - | - | 0.19 | |||||||||||||||||||||||
Diluted earnings per share from continuing | |||||||||||||||||||||||||||
operations, as adjusted: | $ | 0.48 | $ | 0.51 | $ | 1.75 | $ | 1.90 | |||||||||||||||||||
Net cash provided by operating activities, | |||||||||||||||||||||||||||
as reported: | $ | 163,924 | $ | 258,094 | $ | 514,639 | $ | 655,526 | |||||||||||||||||||
Capital expenditures | (36,686 | ) | (59,286 | ) | (166,329 | ) | (180,556 | ) | |||||||||||||||||||
Restructuring payments | 16,030 | 14,011 | 62,086 | 56,162 | |||||||||||||||||||||||
(Receipts) payments related to investment divestiture |
- | (59,475 | ) | 20,602 | (5,737 | ) | |||||||||||||||||||||
Reserve account deposits | 1,428 | 253 | (24,202 | ) | (15,666 | ) | |||||||||||||||||||||
Acquisition related compensation payment | - | - | 10,483 | - | |||||||||||||||||||||||
Tax payment related to sale of Imagitas | 5,306 | - | 21,224 | - | |||||||||||||||||||||||
Cash transaction fees related to acquisitions | |||||||||||||||||||||||||||
and dispositions | 6,856 | - | 17,971 | - | |||||||||||||||||||||||
Extinguishment of debt | - | - | - | 61,657 | |||||||||||||||||||||||
Free cash flow, as adjusted: | $ | 156,858 | $ | 153,597 | $ | 456,474 | $ | 571,386 | |||||||||||||||||||
Note: The sum of the earnings per share amounts may not equal the totals due to rounding. | |||||||||||||||||||||||||||
Pitney Bowes Inc. | |||||||||||||||||||||
Reconciliation of Reported Consolidated Results to Adjusted Results | |||||||||||||||||||||
(Unaudited; in thousands) | |||||||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Income from continuing operations | |||||||||||||||||||||
after income taxes, as reported | $ | 80,426 | $ | 58,952 | $ | 402,672 | $ | 300,006 | |||||||||||||
Restructuring charges and asset impairments, net | 9,481 | 44,188 | 18,089 | 59,349 | |||||||||||||||||
Loss (gain) on sale/disposition of businesses | 4,149 | - | (84,250 | ) | - | ||||||||||||||||
Acquisition and disposition transaction costs | 48 | - | 11,475 | - | |||||||||||||||||
Legal settlement | - | - | 4,250 | - | |||||||||||||||||
Acquisition related compensation expense | - | - | 7,246 | - | |||||||||||||||||
Investment divestiture | - | - | (7,756 | ) | (9,774 | ) | |||||||||||||||
Extinguishment of debt | - | - | - | 37,833 | |||||||||||||||||
Income from continuing operations | |||||||||||||||||||||
after income taxes, as adjusted | 94,104 | 103,140 | 351,726 | 387,414 | |||||||||||||||||
Provision for income taxes, as adjusted | 46,581 | 50,840 | 186,651 | 155,705 | |||||||||||||||||
Preferred stock dividends of subsidiaries | |||||||||||||||||||||
attributable to noncontrolling interests | 4,594 | 4,594 | 18,375 | 18,375 | |||||||||||||||||
Income from continuing operations | |||||||||||||||||||||
before income taxes, as adjusted | 145,279 | 158,574 | 556,752 | 561,494 | |||||||||||||||||
Interest, net | 40,003 | 42,013 | 159,374 | 169,450 | |||||||||||||||||
Adjusted EBIT | 185,282 | 200,587 | 716,126 | 730,944 | |||||||||||||||||
Depreciation and amortization | 45,826 | 54,728 | 173,312 | 197,234 | |||||||||||||||||
Adjusted EBITDA | $ | 231,108 | $ | 255,315 | $ | 889,438 | $ | 928,178 | |||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160202005267/en/
Contact:
For Pitney Bowes Inc.
Editorial
Bill Hughes, 203-351-6785
Chief
Communications Officer
or
Financial
Charles F. McBride,
203-351-6349
VP, Investor Relations