STAMFORD, Conn. — (BUSINESS WIRE) — April 30, 2013 — Pitney Bowes Inc. (NYSE: PBI) today reported financial results for the first quarter 2013.
First quarter revenue of $1.2 billion
- Year-over-year 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 $0.42
- GAAP EPS from continuing operations of $0.34, which includes costs of $0.08 associated with the recent debt tender
- First quarter free cash flow of $107 million; GAAP cash from operations of $132 million
- Issued $425 million of 30 year bonds and retired approximately $405 million of debt originally scheduled to mature between 2014 and 2016.
- Sale of the U.S. International Mail Services (IMS) business completed
- On April 29, 2013, the Board of Directors approved a second quarter dividend of 18.75 cents per share for the Company’s common stock.
President and Chief Executive Officer, Marc Lautenbach, commented, “We are taking a number of actions in support of the long-term health and growth of our business. While the results for the quarter were mixed, we are seeing progress in key elements of the business. We continued to experience a moderation in the decline of recurring revenue streams in our SMB group, as well as growth in both our Production Mail and Mail Services segments. Mail Services revenue grew because of increased cross-border shipments, related to the early stages of implementation of our partnership with ebay. We had weaker revenue and EBIT results than expected in our Software segment due in part to continued global economic uncertainty. We believe we have substantial opportunities in these software markets and have taken actions to capture these opportunities.
“Since joining the Company, I have actively sought input on strengths and opportunities from our clients, our shareholders and our management team. As a result, we have identified actions and developed plans focused on improving revenues, managing costs, and improving working capital. We have taken some very important first steps, including the announcement of a number of new management appointments, actions to enhance our balance sheet and capital allocation flexibility and exiting some non-strategic businesses.
“In connection with our ongoing management of the Company’s capital structure, our Board of Directors approved a reduced second quarter dividend of 18.75 cents per share for the Company’s common stock. This action will provide us the added financial flexibility to invest in the business and enhance our capital structure, while continuing to provide a very competitive return to shareholders.
“I am excited at our prospects and look forward to providing the details of these plans and our path to enhance shareholder value at our Investor Update meeting on May 3rd.”
First Quarter 2013 Results
Revenue for the quarter was $1.2 billion, a decline of 4 percent when compared to the prior year. Revenue for the quarter benefited from growth in the Production Mail and Mail Services segments. International Mailing revenue was flat with the prior year. Revenue was adversely impacted by lower recurring revenue streams in the Small and Medium Business (SMB) group, lower licensing revenue in the Software segment, and some pricing pressures in the Management Services segment.
Earnings per diluted share for the quarter, on a Generally Accepted Accounting Principles (GAAP) basis, were $0.33 compared to $0.79 per diluted share for the prior year.
First quarter 2012 GAAP earnings per diluted share included a $0.11 per share tax benefit in continuing operations, plus a $0.10 per share tax benefit in discontinued operations, resulting from the resolution of additional tax matters with the IRS. First quarter 2012 GAAP earnings per diluted share also included a net $0.06 per share benefit from the sale of leveraged lease assets in Canada.
First quarter 2013 GAAP earnings per diluted share were reduced by $0.08 due to costs associated with the retirement of approximately $405 million of debt originally scheduled to mature between 2014 and 2016.
Excluding the factors noted above, adjusted earnings per diluted share from continuing operations for the first quarter 2013 were $0.42 compared to $0.52 in the prior year, as detailed in the table below:
|Earnings Per Share Reconciliation*||Q1 2013||Q1 2012|
Discontinued operations – (income) loss
|GAAP EPS from continuing operations||$0.34||$0.70|
|Sale of Leveraged Lease Assets||-||($0.06)|
|Costs associated with retirement of debt||$0.08||-|
|Adjusted EPS from continuing operations including net tax benefit||$0.42||$0.64|
|Net tax benefit||-||($0.11)|
|Adjusted EPS from continuing operations excluding net tax benefit||$0.42||$0.52|
* The sum of the earnings per share may not equal the totals above due to rounding.