Pitney Bowes (NYSE:PBI), a global shipping and mailing company that provides technology, logistics, and financial services, today announced its financial results for the second quarter 2022.

"While there were some very positive aspects to our second quarter, our financial results were below our expectations," said Marc B. Lautenbach, President and CEO, Pitney Bowes. "In Global Ecommerce, we were not able to overcome macroeconomic headwinds, including the strength of the US dollar and the COVID shutdown in China, which caused a reduction in some of our package volumes. However, we are encouraged by a sustained improvement in our domestic parcel network service levels, which is driving domestic parcel revenue growth and a robust pipeline of new clients. Our Presort and SendTech businesses in the aggregate posted revenue growth on a constant currency basis. Finally, proceeds from the sale of Borderfree enhances financial flexibility as we continue to execute against our long-term plan."

Second Quarter Financial Highlights

Revenue in the quarter was $871 million, a decrease of 3 percent on a reported basis and 2 percent on a constant currency basis from the comparable quarter in 2021
GAAP EPS and Adjusted EPS were $0.02 in the quarter versus $0.11 in second quarter 2021
GAAP cash from operations in the quarter was $35 million
Free cash flow was $6 million versus $87 million in second quarter 2021; decrease driven largely by lower customer deposits and net income

Second Quarter Business Highlights

Global Ecommerce posted domestic parcel revenue growth of 6 percent
Domestic parcel gross margins expanded despite lower volumes
Presort revenue grew 3 percent on a year-over-year basis
SendTech revenue grew on a constant currency basis with growth in shipping and equipment sales offset by lower financing and services revenues
Announced divestiture of Borderfree for approximately $100 million with proceeds received in early July

Earnings per share results are summarized in the table below

	Second Quarter
	2022	2021
GAAP EPS	$0.02	$0.11
Discontinued Operations	-	$0.01
GAAP EPS from Continuing Operations	$0.02	$0.12
Restructuring Charges	$0.02	$0.02
Gain on Sale of Assets/Business	-	($0.03)
Tax Benefit from Sale of Business	($0.03)	-
Transaction Costs	$0.02	-
Adjusted EPS	$0.02	$0.11

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

Business Segment Reporting

Global Ecommerce

Global Ecommerce provides business to consumer logistics services for domestic and cross border delivery, returns and fulfillment.

	Second Quarter
($ millions)	2022	2021	% Change Reported	% Change Ex Currency
Revenue	$394	$418	(6%)	(5%)
EBITDA	($7)	$8	>(100%)
EBIT	($29)	($11)	>(100%)

Overall segment revenue declined as domestic parcel revenue growth was offset by lower cross-border volumes amid a more challenging macroeconomic environment, especially a stronger US Dollar.

Domestic parcel volumes were 39 million, a 5 million decrease compared to prior year, driven by weakness in volumes originating in China and processed by our domestic network. Parcel volumes from North American clients increased mid-single digits.

Improved domestic parcel gross margins were more than offset by lower cross-border results and higher operating expenses, resulting in lower profitability.

Presort Services

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.

	Second Quarter
($ millions)	2022	2021	% Change Reported	% Change Ex Currency
Revenue	$139	$135	3%	3%
EBITDA	$20	$23	(13%)
EBIT	$13	$16	(20%)

Revenue growth was driven by better revenue per piece and new client volume. Total volumes were impacted by a softening economy and declined in the quarter. EBITDA and EBIT margins declined in the quarter due to inflationary pressures on labor and transportation costs.

SendTech Solutions

Sending Technology Solutions offers physical and digital mailing and shipping technology solutions, financing, services, supplies and other applications for small and medium businesses, retail, enterprise, and government clients around the world to help simplify and save on the sending, tracking and receiving of letters, parcels and flats.

	Second Quarter
($ millions)	2022	2021	% Change Reported	% Change Ex Currency
Revenue	$339	$346	(2%)	0%
EBITDA	$103	$115	(10%)
EBIT	$96	$107	(11%)

Higher equipment sales and shipping related revenues were offset by lower finance and service revenues. EBITDA and EBIT declines were driven primarily by a decrease in high margin finance and service revenues.

Revised 2022 Expectations

Based on uncertain macroeconomic conditions, first half results, and the sale of Borderfree, the Company expects full year revenue (constant currency) to range from a low-single digit percentage decline to a low single digit percentage increase.

The Company also expects full year EBIT to range from a high-single digit percentage decline to a mid-single digit percentage increase.

In addition, the Company expects to generate solid free cash flow for full year 2022 though at a lower level than prior year.

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. EDT. 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 shipping and mailing company that provides technology, logistics, and financial services to more than 90 percent of the Fortune 500. Small business, retail, enterprise, and government clients around the world rely on Pitney Bowes to remove the complexity of sending mail and parcels. For additional information, visit: 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.

Adjusted EBIT, Adjusted EBITDA and Adjusted EPS exclude the impact of discontinued operations, restructuring charges, gains, losses and costs related to acquisitions and dispositions, asset and goodwill impairment charges, and other unusual or one-time items. Such items are often inconsistent in amount and frequency and as such, the Company believes that these 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.

Free cash flow adjusts cash from operations calculated in accordance with GAAP for discontinued operations, capital expenditures, restructuring payments, changes in customer deposits held at the Pitney Bowes Bank and other special items. The Company reports free cash flow to provide investors insight into the amount of cash that management could have available for other discretionary uses.

Segment EBIT is the primary measure of profitability and operational performance at the segment level and is determined by deducting from segment revenue the related costs and expenses attributable to the segment. Segment EBIT excludes interest, taxes, unallocated corporate expenses, restructuring charges, asset and goodwill impairment charges, and other items not allocated to a segment. The Company also reports segment EBITDA as an additional useful measure of segment profitability and operational performance.

Complete reconciliations of non-GAAP measures to comparable GAAP measures can be found in the attached financial schedules and at the Company's web site at 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 future revenue and earnings guidance and 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. In particular, we continue to navigate the impacts of the Covid-19 pandemic (Covid-19) as well as the risk of a global recession, and the effects that they may have on our, and our client's business. Other factors which could cause future financial performance to differ materially from expectations, and which may also be exacerbated by Covid-19 or the risk of a global recession or a negative change in the economy, include, without limitation, declining physical mail volumes; changes in postal regulations or the operations and financial health of posts in the U.S. or other major markets or changes to the broader postal or shipping markets; the loss of, or significant changes to, United States Postal Service (USPS) commercial programs, or our contractual relationships with the 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 Global Ecommerce segment; changes in labor and transportation availability and costs; and other factors as more fully outlined in the Company's 2021 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 and six months ended June 30, 2022 and 2021, and consolidated balance sheets at June 30, 2022 and December 31, 2021 are attached.

Disclosure Using Social Media

Pitney Bowes announces material information to its investors using SEC filings, press releases, public conference calls and webcasts. The Company already makes frequent use of its investor relations website to disseminate material information, as well as social media platforms, including Twitter, Facebook and LinkedIn. Investors, buy and sell-side analysts, media and influencers should note that the Company plans to continue to announce material financial information using the Pitney Bowes investor relations website, SEC filings, and press releases, public conference calls and webcasts. Pitney Bowes is notifying investors, media and others interested in the Company that in the future, the Company may choose to communicate material information through its social media channels, or it is possible that information it discloses through social media channels may be deemed to be material. Therefore, Pitney Bowes encourages investors, the media, and others interested in the Company to review the information posted on the Company's investor relations site (https://www.investorrelations.pitneybowes.com/), Twitter (https://twitter.com/PBnews and https://twitter.com/PitneyBowes), Facebook (https://www.facebook.com/PitneyBowes/), and LinkedIn (https://www.linkedin.com/company/pitney-bowes/). The Company may communicate on social media platforms not listed here as well as create new accounts in the future. Any updates to the list of social media channels Pitney Bowes will use to announce material information will be posted on the Investor Relations page.

Pitney Bowes Inc.
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)

	Three months ended June 30,						Six months ended June 30,
		2022			2021			2022			2021
Revenue:
Business services	$	551,478		$	567,022		$	1,148,862		$	1,137,476
Support services		107,625			115,156			217,977			233,853
Financing		67,298			73,453			139,327			151,265
Equipment sales		89,986			86,267			179,282			173,070
Supplies		38,245			38,655			79,306			80,879
Rentals		16,863			18,650			33,683			37,857
Total revenue		871,495			899,203			1,798,437			1,814,400

Costs and expenses:
Cost of business services		477,544			482,814			980,759			982,348
Cost of support services		37,711			37,679			74,845			74,396
Financing interest expense		12,533			11,773			24,135			23,659
Cost of equipment sales		63,815			61,561			127,586			123,401
Cost of supplies		11,028			10,467			22,545			21,678
Cost of rentals		7,473			6,013			12,782			12,460
Selling, general and administrative		226,638			236,190			469,423			474,292
Research and development		11,254			11,059			22,588			22,375
Restructuring charges		4,224			4,844			8,408			7,733
Interest expense, net		21,007			24,346			43,131			49,504
Other components of net pension and postretirement expense		958			312			1,802			662
Other (income) expense, net		-			(13,646	)		(11,901	)		37,748
Total costs and expenses		874,185			873,412			1,776,103			1,830,256

(Loss) income from continuing operations before taxes		(2,690	)		25,791			22,334			(15,856	)
(Benefit) provision for income taxes		(7,026	)		4,915			(2,823	)		(9,077	)
Income (loss) from continuing operations		4,336			20,876			25,157			(6,779	)
Loss from discontinued operations, net of tax		-			(1,020	)		-			(4,906	)
Net income (loss)	$	4,336		$	19,856		$	25,157		$	(11,685	)

Basic earnings (loss) per share:
Continuing operations	$	0.02		$	0.12		$	0.14		$	(0.04	)
Discontinued operations		-			(0.01	)		-			(0.03	)
Net income (loss)	$	0.02		$	0.11		$	0.14		$	(0.07	)

Diluted earnings (loss) per share:
Continuing operations	$	0.02		$	0.12		$	0.14		$	(0.04	)
Discontinued operations		-			(0.01	)		-			(0.03	)
Net income (loss)	$	0.02		$	0.11		$	0.14		$	(0.07	)

Weighted-average shares used in diluted earnings per share		176,969			178,979			177,673			173,367

(1)

The sum of the earnings per share amounts may not equal the totals due to rounding.

Pitney Bowes Inc.
Consolidated Balance Sheets
(Unaudited; in thousands)

Assets	June 30, 2022			December 31, 2021
Current assets:
Cash and cash equivalents	$	570,697		$	732,480
Short-term investments		11,519			14,440
Accounts and other receivables, net		268,722			334,630
Short-term finance receivables, net		557,571			560,680
Inventories		82,797			78,588
Current income taxes		15,875			13,894
Assets held for sale		108,677			36,394
Other current assets and prepayments		151,090			120,947
Total current assets		1,766,948			1,892,053
Property, plant and equipment, net		427,438			429,162
Rental property and equipment, net		30,889			34,774
Long-term finance receivables, net		592,928			587,427
Goodwill		1,060,452			1,135,103
Intangible assets, net		82,770			132,442
Operating lease assets		242,452			208,428
Noncurrent income taxes		62,849			68,398
Other assets		410,865			471,084
Total assets	$	4,677,591		$	4,958,871

Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities	$	827,639		$	922,543
Customer deposits at Pitney Bowes Bank		616,150			632,062
Current operating lease liabilities		42,253			40,299
Current portion of long-term debt		24,752			24,739
Advance billings		96,573			99,280
Liabilities held for sale		18,700			-
Current income taxes		2,865			9,017
Total current liabilities		1,628,932			1,727,940
Long-term debt		2,194,767			2,299,099
Deferred taxes on income		268,416			286,445
Tax uncertainties and other income tax liabilities		31,643			31,935
Noncurrent operating lease liabilities		227,238			192,092
Other noncurrent liabilities		282,441			308,728
Total liabilities		4,633,437			4,846,239

Stockholders' equity:
Common stock		323,338			323,338
Additional paid-in-capital		-			2,485
Retained earnings		5,137,248			5,169,270
Accumulated other comprehensive loss		(850,053	)		(780,312	)
Treasury stock, at cost		(4,566,379	)		(4,602,149	)
Total stockholders' equity		44,154			112,632
Total liabilities and stockholders' equity	$	4,677,591		$	4,958,871

Pitney Bowes Inc.
Business Segment Revenue
(Unaudited; in thousands)


	Three months ended June 30,						Six months ended June 30,
		2022		2021	% Change			2022		2021	% Change

Global Ecommerce	$	393,770	$	418,429	(6	%)	$	812,297	$	831,515	(2	%)
Presort Services		138,934		134,619	3	%		299,478		277,745	8	%
Sending Technology Solutions		338,791		346,155	(2	%)		686,662		705,140	(3	%)
Total revenue - GAAP		871,495		899,203	(3	%)		1,798,437		1,814,400	(1	%)
Currency impact on revenue		10,775		-				14,767		-
Revenue, at constant currency	$	882,270	$	899,203	(2	%)	$	1,813,204	$	1,814,400	(0	%)

Pitney Bowes Inc.
Business Segment EBIT & EBITDA
(Unaudited; in thousands)

	Three months ended June 30,
							2022								2021		% change
	EBIT ⁽¹⁾			D&A		EBITDA			EBIT ⁽¹⁾			D&A		EBITDA			EBIT		EBITDA

Global Ecommerce	$	(28,825	)	$	21,480	$	(7,345	)	$	(10,831	)	$	19,060	$	8,229		>(100%)		>(100%)
Presort Services		12,851			7,000		19,851			16,134			6,798		22,932		(20	%)	(13	%)
Sending Technology Solutions		95,565			7,908		103,473			107,121			7,537		114,658		(11	%)	(10	%)
Segment total	$	79,591		$	36,388		115,979		$	112,424		$	33,395		145,819		(29	%)	(20	%)

*Reconciliation of Segment EBITDA to Net Income:*
Segment depreciation and amortization							(36,388	)							(33,395	)
Unallocated corporate expenses							(40,761	)							(56,316	)
Restructuring charges							(4,224	)							(4,844	)
Gain on sale of assets							-								1,434
Gain on sale of business							-								10,201
Loss on debt redemption/refinancing							-								(989	)
Transaction costs							(3,756	)							-
Interest, net							(33,540	)							(36,119	)
Benefit (provision) for income taxes							7,026								(4,915	)
Income from continuing operations							4,336								20,876
Loss from discontinued operations, net of tax							-								(1,020	)
Net income						$	4,336							$	19,856

	Six months ended June 30,
	2022								2021								% change
	EBIT ⁽¹⁾			D&A		EBITDA			EBIT⁽¹⁾			D&A		EBITDA			EBIT		EBITDA

Global Ecommerce	$	(42,521	)	$	42,924	$	403		$	(37,207	)	$	37,236	$	29		(14	%)	>100%
Presort Services		32,483			13,419		45,902			35,185			14,297		49,482		(8	%)	(7	%)
Sending Technology Solutions		200,140			14,911		215,051			221,591			15,140		236,731		(10	%)	(9	%)
Segment Total	$	190,102		$	71,254		261,356		$	219,569		$	66,673		286,242		(13	%)	(9	%)

*Reconciliation of Segment EBITDA to Net Income (Loss):*
Segment depreciation and amortization							(71,254	)							(66,673	)
Unallocated corporate expenses							(98,595	)							(113,781	)
Restructuring charges							(8,408	)							(7,733	)
Gain on sale of assets							14,372								1,434
Gain on sale of business							2,522								10,201
Loss on debt redemption/refinancing							(4,993	)							(52,383	)
Transaction costs							(5,400	)							-
Interest, net							(67,266	)							(73,163	)
Benefit for income taxes							2,823								9,077
Income (loss) from continuing operations							25,157								(6,779	)
Loss from discontinued operations, net of tax							-								(4,906	)
Net income (loss)						$	25,157							$	(11,685	)

(1)

Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, and other items that are not allocated to a particular business segment. In 2022, we refined the methodology for allocating transportation costs between Global Ecommerce and Presort Services, resulting in an increase in Global Ecommerce EBIT and a corresponding decrease in Presort Services EBIT of $3 million and $7 million for the three and six months ended June 30, 2022, respectively.

Pitney Bowes Inc.
Reconciliation of Reported Consolidated Results to Adjusted Results
(Unaudited; in thousands, except per share amounts)

	Three months ended June 30,						Six months ended June 30,
		2022			2021			2022			2021

*Reconciliation of reported net income (loss) to adjusted EBIT and EBITDA*
Net income (loss)	$	4,336		$	19,856		$	25,157		$	(11,685	)
Loss from discontinued operations, net of tax		-			1,020			-			4,906
(Benefit) provision for income taxes		(7,026	)		4,915			(2,823	)		(9,077	)
(Loss) income from continuing operations before taxes		(2,690	)		25,791			22,334			(15,856	)
Restructuring charges		4,224			4,844			8,408			7,733
Gain on sale of assets		-			(1,434	)		(14,372	)		(1,434	)
Gain on sale of business		-			(10,201	)		(2,522	)		(10,201	)
Loss on debt redemption/refinancing		-			989			4,993			52,383
Transaction costs		3,756			-			5,400			-
Adjusted net income before tax		5,290			19,989			24,241			32,625
Interest, net		33,540			36,119			67,266			73,163
Adjusted EBIT		38,830			56,108			91,507			105,788
Depreciation and amortization		43,470			39,822			85,472			79,416
Adjusted EBITDA	$	82,300		$	95,930		$	176,979		$	185,204

*Reconciliation of reported diluted earnings (loss) per share to adjusted diluted earnings per share*
Diluted earnings (loss) per share	$	0.02		$	0.11		$	0.14		$	(0.07	)
Loss from discontinued operations, net of tax		-			0.01			-			0.03
Restructuring charges		0.02			0.02			0.03			0.03
Gain on sale of assets		-			(0.01	)		(0.06	)		(0.01	)
Gain on sale of business		-			(0.02	)		(0.02	)		(0.02	)
Loss on debt redemption/refinancing		-			-			0.02			0.22
Tax benefit on sale of business		(0.03	)					(0.03	)
Transaction costs		0.02			-			0.02			-
Adjusted diluted earnings per share ⁽¹⁾	$	0.02		$	0.11		$	0.10		$	0.19

⁽¹⁾ The sum of the earnings per share amounts may not equal the totals due to rounding.

*Reconciliation of reported net cash from operating activities to free cash flow*
Net cash from operating activities	$	35,132		$	78,806		$	45,694		$	144,729
Capital expenditures		(31,619	)		(40,375	)		(64,174	)		(83,703	)
Restructuring payments		4,970			4,870			8,255			8,825
Change in customer deposits at PB Bank		(2,953	)		43,427			(15,912	)		15,633
Transaction costs paid		-			-			2,132			-
Free cash flow	$	5,530		$	86,728		$	(24,005	)	$	85,484

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Pitney Bowes Announces Second Quarter 2022 Financial Results