STAMFORD, Conn. — (BUSINESS WIRE) — July 30, 2013 — Pitney Bowes Inc. (NYSE: PBI) today reported financial results for the second quarter 2013.
SECOND QUARTER HIGHLIGHTS
Revenue of $1.2 billion, nearly flat to the prior year excluding the
impacts of currency and a decline of less than 1%, as reported
- Double-digit revenue growth in Production Mail and Mail Services
- Continued moderation in decline of recurring revenue streams in the SMB group
- Adjusted EPS from continuing operations of $0.52
- Operating results and the loss on sale related to the European businesses of the Management Services segment recorded in discontinued operations. Prior period results have been reclassified to reflect this change.
GAAP EPS loss of $0.05, which includes:
- $0.40 per share charge for goodwill impairment
- $0.07 per share charge for restructuring
- $0.10 per share loss in discontinued operations
- Free cash flow of $124 million; GAAP cash from operations of $147 million
- Retired $375 million of debt that matured in June
- Definitive agreement signed to sell the North America operations of Management Services to funds affiliated with Apollo Global Management, LLC
- Updates annual guidance for 2013
“Pitney Bowes is making solid progress on its transformative journey to improve the growth profile and profitability of the business,” said Marc Lautenbach, President and Chief Executive Officer. “The actions we have taken over the last six months and the results for this quarter are consistent with the Company’s long-term strategies that we detailed at Analyst Day in May.
“We are continuing to invest in the growth areas of our business, while at the same time becoming more efficient, flexible and focused to meet the changing needs of our clients. In addition, we have strengthened our balance sheet by further reducing debt and continue to drive operational excellence that will further enhance client and shareholder value.”
SECOND QUARTER 2013 RESULTS
Today, the Company announced that it has entered into a definitive agreement to sell the North America portion of its Management Services business to funds affiliated with Apollo Global Management, LLC. This business will be reflected as a discontinued operation in the third quarter.
During the second quarter, the Company entered into definitive agreements to sell the European businesses of Management Services and has reflected the results of these businesses in discontinued operations. Prior period results have been reclassified to reflect this change. Revenue this quarter excludes approximately $45 million for revenue associated with the European operations of Management Services.
Revenue for the quarter was $1.2 billion, which was a decline of less than 1% when compared to the prior year and nearly flat to the prior year excluding the impacts of currency. Revenue for the quarter benefited from double-digit growth in the Production Mail and Mail Services segments. International Mailing revenue was flat with the prior year excluding the impacts of currency. The growth areas were offset by lower recurring revenue streams in the SMB group, lower licensing revenue in the Software segment and lower revenue due to continued pricing pressure on some contract renewals in the Management Services segment.
As a result of lower than expected first half operating performance for the North America operations of Management Services, including pricing pressure on contract renewals and a longer than anticipated sales cycle for some of the new growth areas, future near-term cash flows are now estimated to be lower than originally projected. Accordingly, the Company performed a goodwill impairment review as of June 30, 2013. As a result, a non-cash, pre-tax goodwill impairment charge of $98 million was recorded in the second quarter.
Earnings per diluted share for the quarter, on a Generally Accepted
Accounting Principles (GAAP) basis was a loss of $0.05 per share
compared to income of $0.50 per share for the prior year. GAAP earnings
per share include a non-cash, pre-tax goodwill impairment charge of
$0.40 per share; a restructuring charge of $0.07 per share; and a loss
from discontinued operations of $0.10 per share.