Pitney bowes announces fourth quarter and full year 2020 financial results
Stamford, conn.--(business wire)--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 fourth quarter and full year 2020. "the fourth quarter was a remarkable ending to an extraordinary year,” said marc b. lautenbach, president and ceo, pitney bowes. “revenue growth was the highest modern day, organic growth rate on-record for us. “we have been on a journey to transform the business,” lautenbach continued. “even with the tremendous uncertainty in our economy and how the pandemic will play out, we are now poised to enter this next chapter of our transformation, profitable revenue growth. while i am proud of what the team has accomplished, we all recognize there is more work to do and we are ready.” fourth quarter 2020 revenue of $1.0 billion, growth of 24 percent on a reported basis and 23 percent excluding the impact of currency gaap eps of $0.11; adjusted eps of $0.13 eps reflects $0.03 in tax benefits primarily related to deferred tax balances in certain international tax jurisdictions. gaap cash from operations of $111 million; free cash flow of $97 million the company reduced debt by $31 million. shipping-related revenues represented 54 percent of total revenue. global ecommerce revenue exceeded $500 million for the first time, representing growth of 60 percent over prior year. global ecommerce ebit dollars and margin improved from prior quarter and over prior year, with positive ebitda in the quarter. presort services revenue improved from prior quarter and was flat to prior year. sendtech grew revenue, ebit and ebitda dollars from prior quarter and over prior year. sendtech shipping revenue was $35 million and grew at a double-digit rate. full year 2020 revenue of $3.6 billion, growth of 11 percent gaap eps loss of $1.06; adjusted eps of $0.30 gaap cash from operations of $298 million; free cash flow of $279 million the company ended the year with $940 million in cash and short term investments. the company reduced debt by $175 million. shipping-related revenues represented 50 percent of total revenue. global ecommerce revenue of $1.6 billion, representing growth of 41 percent. presort services processed a total of 16.7 billion pieces. sendtech shipped 20,000 units of the sendpro mailstation since launching in april. earnings per share results are summarized in the table below: fourth quarter full year 2020 2019 2020 2019 gaap eps $ 0.11 $ 1.03 ($ 1.06 ) $ 1.10 discontinued operations ($ 0.01 ) ($ 0.98 ) ($ 0.06 ) ($ 0.87 ) gaap eps from continuing operations $ 0.09 $ 0.05 ($ 1.12 ) $ 0.23 goodwill impairment - - $ 1.13 - loss on extinguishment of debt - $ 0.03 $ 0.16 $ 0.03 restructuring charges and asset impairments $ 0.04 $ 0.06 $ 0.09 $ 0.30 tax on settlement of investment securities - - $ 0.07 - loss on dispositions and transaction costs - $ 0.01 - $ 0.13 gain on sale of an equity investment - - ($ 0.05 ) - adjusted eps $ 0.13 $ 0.14 $ 0.30 $ 0.68 * the sum of the earnings per share may not equal the totals due to rounding. business segment reporting the commerce services group includes the global ecommerce and presort services segments. global ecommerce facilitates domestic retail and ecommerce shipping solutions, including fulfillment and returns, 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. the sending technology solutions segment 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. the sum of the segment results may not equal the totals due to rounding. commerce services fourth quarter ($ millions) 2020 2019 b/(w) reported b/(w) ex currency revenue global ecommerce $518 $324 60% 60% presort services 135 135 0% 0% commerce services $653 $459 42% 42% ebitda global ecommerce $3 $0 >100% presort services 21 30 (30%) commerce services $24 $30 (20%) ebit global ecommerce ($15) ($18) 19% presort services 13 22 (42%) commerce services ($2) $4 >(100%) global ecommerce revenue benefited from growth in volumes in domestic parcel, cross border and digital delivery services. ebit and ebitda benefitted from the increased demand and a peak surcharge, offset by higher costs, particularly around postal, transportation and labor. presort services revenue was flat to prior year driven by flat first class revenue, a decline in marketing mail and growth in marketing mail flats and bound printed matter. ebit and ebitda margins were relatively in line with prior quarters. compared to prior year, ebit and ebitda declined largely due to higher medical claims and increased labor costs as well as covid-related direct costs. sendtech solutions fourth quarter ($ millions) 2020 2019 b/(w) reported b/(w) ex currency revenue $376 $372 1% 0% ebitda $126 $122 4% ebit $118 $112 5% revenue growth over prior year driven by equipment sales and business services, partly offset by declines in support services, supplies and financing revenues. ebit and ebitda margins improved from prior year driven largely by lower expenses. 2021 expectations the company expects annual revenue to grow over prior year in the low-to-mid single digit range, making 2021 the fifth consecutive year of constant currency growth. the company expects adjusted eps to grow over prior year. the company also expects lower free cash flow primarily due to the changes in certain working capital items that benefitted 2020 and are not expected to continue at the same level in 2021. 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 technology company providing commerce solutions that power billions of transactions. clients around the world, including 90 percent of the fortune 500, rely on the accuracy and precision delivered by pitney bowes solutions, analytics, and apis in the areas of ecommerce fulfillment, shipping and returns; cross-border ecommerce; office mailing and shipping; presort services; and financing. for 100 years, pitney bowes has been innovating and delivering technologies that remove the complexity of getting commerce transactions precisely right. for additional information visit pitney bowes, the craftsmen of commerce, at 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. the company reports measures such as adjusted ebit, adjusted ebitda and adjusted eps to exclude the impact of items like 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. while these are actual company income or expenses, they can mask underlying trends associated with its business. such items are often inconsistent in amount and frequency and as such, the 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. a reconciliation of reported revenue to constant currency revenue can be found in the attached financial schedules. the company reports free cash flow in order to provide investors insight into the amount of cash that management could have available for other discretionary uses. free cash flow adjusts gaap cash from operations for cash flows of discontinued operations, capital expenditures, restructuring payments, changes in customer deposits held at the pitney bowes bank, transaction costs and other special items. a reconciliation of gaap cash from operations to free cash flow can be found in the attached financial schedules. segment ebit is the primary measure of profitability and operational performance at the segment level. segment ebit is determined by deducting from segment 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. the company also provides segment ebitda, which further excludes depreciation and amortization expense for the segment, as an additional useful measure of segment profitability and operational performance. a reconciliation of segment ebit and ebitda to net income can be found in the attached financial schedules. pitney bowes has provided a quantitative reconciliation to gaap in supplemental schedules. this information can 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 the severity, magnitude and duration of the covid-19 pandemic (covid-19), including governments' responses to covid-19, the efficacy and availability of a vaccine, its continuing impact on our operations, employees, the availability and cost of labor and transportation, global supply chain and demand across our and our clients' businesses as well as any deterioration or instability in global macroeconomic conditions. 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 operations, or the financial health of posts in the u.s. or other major markets or significant changes to the broader postal or shipping industry; changes in 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 commerce services group; changes in labor and transportation availability and costs; third-party suppliers' ability to provide products and services required by us and our clients; competitive factors, including pricing pressures, technological developments and the introduction of new products and services by competitors; the loss of some of our larger clients in our commerce services group; expenses and potential impacts resulting from a breach of security, including cyber-attacks or other comparable events; our success at managing customer credit risk; and other factors as more fully outlined in the company's 2019 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, 2020 and 2019, and consolidated balance sheets at december 31, 2020 and december 31, 2019 are attached. 2020 2019 2020 2019 $ 666,983 $ 467,192 $ 2,191,306 $ 1,710,801 119,972 123,609 473,292 506,187 80,276 88,051 341,034 368,090 101,200 87,148 314,882 352,104 41,165 45,026 159,282 187,287 18,821 20,317 74,279 80,656 1,028,417 831,343 3,554,075 3,205,125 592,137 386,086 1,904,078 1,389,569 35,856 38,847 149,988 162,300 12,108 11,215 48,162 44,648 71,671 62,116 236,716 244,210 10,928 12,349 41,679 49,882 7,145 8,307 25,600 31,530 242,441 246,761 963,323 1,003,989 9,546 12,837 38,384 51,258 8,207 12,990 20,712 69,606 - - 198,169 - 26,249 26,585 105,753 110,910 (1,834 ) (1,087 ) (1,708 ) (4,225 ) (1,636 ) 5,956 8,151 24,306 1,012,818 822,962 3,739,007 3,177,983 15,599 8,381 (184,932 ) 27,142 (813 ) 344 6,727 (13,007 ) 16,412 8,037 (191,659 ) 40,149 2,467 168,659 10,115 154,460 $ 18,879 $ 176,696 $ (181,544 ) $ 194,609 continuing operations $ 0.10 $ 0.05 $ (1.12 ) $ 0.23 0.01 0.99 0.06 0.88 $ 0.11 $ 1.04 $ (1.06 ) $ 1.10 $ 0.09 $ 0.05 $ (1.12 ) $ 0.23 0.01 0.98 0.06 0.87 $ 0.11 $ 1.03 $ (1.06 ) $ 1.10 176,835 171,659 171,519 177,449 (1) the sum of the earnings per share amounts may not equal the totals due to rounding. $ 921,450 $ 924,442 18,974 115,879 389,240 373,471 568,050 629,643 65,845 68,251 23,219 5,565 120,145 101,601 - 17,229 2,106,923 2,236,081 391,280 376,177 38,435 41,225 605,292 625,487 1,152,285 1,324,179 159,839 190,640 201,916 200,752 72,653 71,903 489,201 400,456 $ 5,217,824 $ 5,466,900 $ 878,303 $ 793,690 617,200 591,118 39,182 36,060 216,032 20,108 114,550 101,920 2,880 17,083 - 9,713 1,868,147 1,569,692 2,348,361 2,719,614 279,451 274,435 38,163 38,834 180,292 177,711 437,015 400,518 5,151,429 5,180,804 common stock 323,338 323,338 additional paid-in-capital 68,502 98,748 5,201,195 5,438,930 (839,131 ) (840,143 ) (4,687,509 ) (4,734,777 ) 66,395 286,096 $ 5,217,824 $ 5,466,900 three months ended december 31, twelve months ended december 31, 2020 2019 % change 2020 2019 % change $ 518,140 $ 323,942 60 % $ 1,618,897 $ 1,151,510 41 % 134,660 135,120 - 521,212 529,588 (2 %) 652,800 459,062 42 % 2,140,109 1,681,098 27 % 375,617 372,281 1 % 1,413,966 1,524,027 (7 %) 1,028,417 831,343 24 % 3,554,075 3,205,125 11 % (3,980 ) - (1,467 ) - $ 1,024,437 $ 831,343 23 % $ 3,552,608 $ 3,205,125 11 % 2020 2019 $ (14,768 ) $ 17,490 $ 2,722 $ (18,177 ) $ 17,687 $ (490 ) 19 % 13,041 8,107 21,148 22,478 7,765 30,243 (42 %) (30 %) (1,727 ) 25,597 23,870 4,301 25,452 29,753 (20 %) 117,656 8,545 126,201 112,227 9,411 121,638 5 % 4 % $ 115,929 $ 34,142 150,071 $ 116,528 $ 34,863 151,391 (1 %) (1 %) (34,142 ) (34,863 ) (38,357 ) (37,800 ) (53,766 ) (51,246 ) (8,207 ) (12,990 ) - (5,956 ) - (155 ) 813 (344 ) 16,412 8,037 2,467 168,659 $ 18,879 $ 176,696 2020 2019 $ (82,894 ) $ 69,676 $ (13,218 ) $ (70,146 ) $ 68,385 $ (1,761 ) (18 %) 55,799 31,769 87,568 70,693 29,440 100,133 (21 %) (13 %) (27,095 ) 101,445 74,350 547 97,825 98,372 (24 %) 441,085 34,316 475,401 490,322 39,758 530,080 (10 %) (10 %) $ 413,990 $ 135,761 549,751 $ 490,869 $ 137,583 628,452 (16 %) (13 %) (135,761 ) (137,583 ) (153,915 ) (155,558 ) (200,406 ) (211,529 ) (20,712 ) (69,606 ) (198,169 ) - 11,908 - (36,987 ) (6,623 ) (641 ) (20,411 ) (6,727 ) 13,007 (191,659 ) 40,149 10,115 154,460 $ (181,544 ) $ 194,609 three months ended december 31, twelve months ended december 31, 2020 2019 2020 2019 $ 18,879 $ 176,696 $ (181,544 ) $ 194,609 (2,467 ) (168,659 ) (10,115 ) (154,460 ) 7,148 10,719 15,641 52,427 - - 196,600 - - - (8,943 ) - - - 12,229 - - 4,464 27,777 4,961 - 999 487 22,313 23,560 24,219 52,132 119,850 38,357 37,800 153,915 155,558 246 3,264 7,537 3,933 62,163 65,283 213,584 279,341 40,222 40,628 160,625 159,142 $ 102,385 $ 105,911 $ 374,209 $ 438,483 $ 0.11 $ 1.03 $ (1.06 ) $ 1.10 (0.01 ) (0.98 ) (0.06 ) (0.87 ) 0.04 0.06 0.09 0.30 - - 1.13 - - - (0.05 ) - - - 0.07 - - 0.03 0.16 0.03 - 0.01 - 0.13 $ 0.13 $ 0.14 $ 0.30 $ 0.68 $ 110,777 $ 84,479 $ 297,887 $ 271,961 (511 ) 6,587 37,912 (9,272 ) (24,201 ) (42,032 ) (104,988 ) (137,253 ) 4,145 8,303 20,014 27,148 6,618 13,216 26,082 16,341 - 10,463 2,117 19,488 $ 96,828 $ 81,016 $ 279,024 $ 188,413
