Pitney Bowes Announces Third Quarter 2015 Financial Results

STAMFORD, Conn. — (BUSINESS WIRE) — October 29, 2015 — Pitney Bowes Inc. (NYSE: PBI), a global technology company that provides products and solutions that power commerce, today reported financial results for the third quarter 2015.

Quarterly Financial Results:

  • Revenue of $870 million, a decline of 4 percent on a constant currency basis and 8 percent as reported.
  • Adjusted EPS of $0.43; GAAP EPS of $0.44. EPS includes a $0.02 per share negative impact of foreign exchange during the quarter.
  • SG&A of $309 million, a decline of $33 million versus prior year.
  • Gross Margin of 58.8 percent, improvement of 150 basis points versus prior year.
  • Free cash flow of $131 million; GAAP cash from operations of $150 million.
  • Repurchased $100 million of stock or 4.9 million shares.
  • Company reaffirms adjusted EPS, GAAP EPS and free cash flow guidance; updates revenue guidance.

Strategic Updates:

  • As announced in September, the Board of Directors authorized an incremental $100 million share repurchase.
  • The Company launched its initial implementation of the new ERP platform in Canada in early October and remains on schedule to achieve the targeted savings and efficiencies associated with this program.
  • The Company introduced several new products and solutions, including:
    • SMB group launched the Relay™ Multi-Channel Communications Suite globally;
    • Production Mail expanded its offerings in print, insertion and sortation equipment through its new AcceleJet™, Epic™ and TrueSort™ products;
    • Software expanded its offerings with the EngageOne® Video solution, which helps enterprises up-sell and cross-sell through personalized videos.
  • The Company made significant progress integrating its Borderfree acquisition while also achieving initial cost synergies.

"We made solid progress on our strategic plan in the third quarter," said Marc B. Lautenbach, President and CEO, Pitney Bowes. “Our North America SMB business continued to stabilize with equipment sales growing for the quarter. We improved our operational excellence with increased margins and very solid cash flow performance in the quarter. Our ERP project, which promises to unlock substantial value in our Company, got off to a very good start in early October with a successful launch in Canada. Finally, although our Ecommerce business continued to face currency headwinds, the integration of Borderfree remains on track. Overall, Digital Commerce grew 10 percent on a constant currency basis and I remain very optimistic about the long-term prospects of this business."


Revenue was $870 million, a decline of 4 percent on a constant currency basis and 8 percent on a reported basis when compared to prior year.

Digital Commerce Solutions revenue grew 10 percent on a constant currency basis and 6 percent on a reported basis. Enterprise Business Solutions revenue declined 1 percent on a constant currency basis and 3 percent on a reported basis. SMB Solutions revenue declined 3 percent on a constant currency basis and 8 percent on a reported basis.

Adjusted earnings per diluted share were $0.43. Prior year adjusted earnings per diluted share were $0.51 and included $0.08 per share of tax benefits. Excluding the tax benefits in the prior year, adjusted earnings per diluted share this quarter would have been flat to the prior year.

Generally Accepted Accounting Principles (GAAP) earnings per diluted share were $0.44 and included a $0.01 per share net tax benefit related to the Company’s previous divestiture of an investment and other acquisition and disposition related transactions.

Earnings per share this quarter were reduced by $0.02 per share due to the impacts of foreign exchange. As expected, earnings per share this quarter were also impacted by the loss of three months of Imagitas earnings, which were estimated to be approximately $0.03 per share, and $0.01 per share of expense for three months of amortization of intangibles related to Borderfree.

The Company’s earnings per share results for the quarter are summarized in the table below:

      Third Quarter *




Adjusted EPS from continuing operations     $ 0.43     $ 0.51  
Net tax benefit from transactions     $ 0.01       -  
Investment divestiture       -     $ 0.05  
Restructuring charges       -       ($0.01 )
GAAP EPS from continuing operations     $ 0.44     $ 0.55  
Discontinued operations - income       -     $ 0.10  
GAAP EPS     $ 0.44     $ 0.65  

* The sum of the earnings per share may not equal the totals above due to rounding

Free cash flow during the quarter was $131 million and cash provided by operating activities was $150 million on a GAAP basis. In comparison to the prior year, third quarter free cash flow was higher primarily due to lower working capital requirements and lower capital expenditures due to less of an investment in the Company’s new ERP platform. During the quarter, the Company used cash to pay $38 million in dividends to its common shareholders, repurchase $100 million worth of its shares and make $15 million in restructuring payments.

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