
STAMFORD, Conn.–(BUSINESS WIRE)–Pitney Bowes (NYSE: PBI), a global shipping and mailing company that provides technology, logistics, and financial services, today announced its financial results for the first quarter 2024.
Jason Dies, Interim Chief Executive Officer, commented:
“We came out of the gate strong with first quarter results that reflect enterprise-wide changes in our operating intensity and efficiency efforts. Net income improved $5 million over prior year. Adjusted EBIT grew by more than $23 million on relatively flat revenue. This includes solid segment-level performance and systematic cost reductions, resulting in an 8% decline in operating expenses.
At the segment level, Presort Services achieved record revenue and EBIT while SendTech once again delivered solid profit increases and margin expansion. Global Ecommerce grew domestic parcel volumes in a challenging market and reduced operating expense as we continue efforts to maximize value.
We are very encouraged by improvements in execution over the past six months and our results for the first quarter in particular. We continue to see opportunities in the remainder of the year. We will build on this momentum by maintaining strong execution and a disciplined focus on costs to increase cashflow and create capacity for investment in high-margin growth areas.”
First Quarter Financial Highlights
- Revenue in the quarter was $831 million, flat compared to prior year
- GAAP EPS improved $0.02 over prior year; Adjusted EPS was flat versus prior year
- Net income was a loss of $3 million, an improvement of $5 million over prior year despite higher interest and tax expense; adjusted EBIT was $56 million, up $23 million or 71 percent over prior year
- GAAP cash from operating activities was a use of $13 million, an improvement of $27 million year-over-year; Free Cash Flow was a use of $17 million, an improvement of $43 million year-over-year
- Cost reduction actions as part of 2023 restructuring plan generated significant benefit in the quarter; now expect savings to exceed $75 to $85 million target
- Cash and short-term investments were $538 million at quarter-end
Earnings per share results are summarized in the table below:
|
First Quarter |
|
|
2024 |
2023 |
GAAP EPS |
($0.02) |
($0.04) |
Restructuring Charges |
$0.02 |
$0.01 |
Foreign Currency Gain on Intercompany Loans |
($0.02) |
– |
Gain on Debt Redemption |
– |
($0.01) |
Proxy Solicitation Fees |
– |
$0.03 |
Transaction Costs |
$0.01 |
– |
Adjusted EPS |
($0.01) |
($0.01) |
Business Segment Reporting
Effective January 1, 2024, we moved the digital delivery services offering from our Global Ecommerce segment to the SendTech Solutions segment in order to leverage our technology and innovation capabilities to better serve our clients. Prior periods have been recast to conform to our current segment presentation.
Quarterly historical financial information consistent with this change can be found within the Financial Reporting section of the Company’s Investor Relations website.
SendTech Solutions
SendTech Solutions offers physical and digital mailing and shipping technology solutions, financing, services, supplies and other applications for small and medium businesses, retail, enterprise, and government clients around the world to help simplify and save on the sending, tracking and receiving of letters, parcels and flats.
|
First Quarter |
||
($ millions) |
2024 |
2023 |
% Change Reported |
Revenue |
$327 |
$335 |
(2%) |
Adjusted Segment EBITDA |
$111 |
$105 |
6% |
Adjusted Segment EBIT |
$101 |
$96 |
6% |
Shipping-related revenue grew 8%, partially offsetting the decline in mailing-related revenue of 4%. The timing of our product lifecycle and a continued reduction in our meter base drove the revenue decline in the quarter.
Favorable revenue mix, improvements in supply chain management, and cost reduction actions drove lower COGS and SG&A, resulting in higher Adjusted Segment EBITDA and EBIT.
Presort Services
Presort Services provides sortation services that enable clients to qualify for USPS workshare discounts in First Class Mail, Marketing Mail, Marketing Mail Flats and Bound Printed Matter.
|
First Quarter |
||
($ millions) |
2024 |
2023 |
% Change Reported |
Revenue |
$170 |
$159 |
7% |
Adjusted Segment EBITDA |
$49 |
$35 |
39% |
Adjusted Segment EBIT |
$40 |
$27 |
50% |
Presort achieved record revenue as higher revenue per piece offset a 2% decline in volumes.
Higher revenue per piece, improved labor productivity from automation refresh and process improvements, and transportation optimization drove margin expansion, resulting in record Adjusted Segment EBITDA and EBIT.
Global Ecommerce
Global Ecommerce provides business to consumer logistics services for domestic and cross-border delivery, returns and fulfillment.
|
First Quarter |
||
($ millions) |
2024 |
2023 |
% Change Reported |
Revenue |
$333 |
$341 |
(2%) |
Adjusted Segment EBITDA |
($21) |
($19) |
(14%) |
Adjusted Segment EBIT |
($35) |
($33) |
(7%) |
Lower Global Ecommerce revenue was driven by a 49% decline in cross-border revenue from changes in how two of our largest clients access our services that occurred in the second quarter 2023. Domestic parcel volumes grew 20% to 60 million processed in the quarter, driving domestic parcel revenue growth of 8%.
Adjusted Segment EBITDA and EBIT declined as a result of the decline in cross-border revenue and lower domestic parcel revenue per piece. Cost actions partially offset the impact of these items and drove a 19% improvement in operating expenses.
Full Year 2024 Guidance
We are maintaining our guidance and expect revenue growth to range from flat to a low-single digit decline and EBIT margins to remain relatively flat on a year-over-year basis.
We are planning similar levels of capital expenditures in 2024 as in 2023 and expect interest expense and taxes to increase over prior year.
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