Pitney Bowes Announces Full Year And Fourth Quarter 2016 Financial Results
Wednesday, February 01, 2017
Press release from the issuing company
STAMFORD, Conn. - Pitney Bowes Inc. (NYSE:PBI), a global technology company providing innovative technology solutions to power commerce, today reported financial results for the full year and the fourth quarter 2016. The Company also has provided an update to its annual guidance for 2017.
Fourth Quarter 2016:
“Our fourth quarter and full-year results were not what we wanted or expected,” said Marc B. Lautenbach, President and Chief Executive Officer. “While we were disappointed in our fourth quarter performance, especially in our Software Solutions business, we closed the year with much of the heavy lifting and short-term disruptions from our transformation initiatives behind us. We are poised to take advantage of all of the hard work we completed in 2016 and over the past four years. Going forward, I remain confident in our long-term strategy, our competitive position, our operational excellence initiatives, and our ability to unlock value for our shareholders.”
Full Year 2016 Results
Revenue totaled $3.4 billion for the year, which was a decline of 5 percent versus prior year. Revenue declined 4 percent versus the prior year when adjusted for the impact of currency and declined 3 percent when adjusted for the impact of currency and previously exited direct operations (market exits) in Mexico, South Africa and five markets in Asia.
Generally Accepted Accounting Principles earnings per diluted share (GAAP EPS) were $0.50, which included $0.22 per share for restructuring and asset impairment charges, $0.03 per share charge from the redemption of the preferred stock of the Company’s Pitney Bowes International Holdings (PBIH) subsidiary, $0.02 from loss on dispositions and $0.01 loss for discontinued operations.
In addition, the Company recorded a non-cash estimate of $0.88 per share goodwill impairment charge related to the Software Solutions business principally as a result of recent operating experience. The Company expects to finalize the valuation assessment and resulting goodwill impairment charge at the time the 10-K is filed and does not anticipate any material adjustment.
Adjusted earnings per diluted share from continuing operations (Adjusted EPS) were $1.68. The Company uses Adjusted EPS to measure performance.
GAAP cash flow from operations for the year was $491 million while free cash flow was $430 million. During the year, the Company used cash to pay $197 million for share repurchases, $141 million in dividends to common shareholders and $65 million in restructuring payments.
Fourth Quarter 2016 Results
Revenue totaled $887 million for the quarter, which was a decline of 5 percent versus prior year. Revenue declined 4 percent versus the prior year when adjusted for the impact of currency and market exits.
Digital Commerce Solutions revenue declined 2 percent on a reported basis and grew 1 percent on a constant currency basis. Double-digit revenue growth in ecommerce marketplace and retail was offset by a decline in Software Solutions and office shipping revenues.
Enterprise Business Solutions revenue declined 5 percent. Revenue declined 3 percent compared to the prior year when adjusted for the impact of currency and market exits. Revenue declined in both Production Mail and Presort Services.
Small and Medium Business (SMB) Solutions revenue declined 7 percent. Revenue declined 6 percent when adjusted for the impact of currency and market exits. North America and International Mailing both contributed to the decline.
GAAP EPS was a loss of $0.44, which included a non-cash estimate of $0.89 per share goodwill impairment charge, $0.05 per share for restructuring and asset impairment charges, $0.01 per share from the redemption of the preferred stock of the Company’s PBIH subsidiary and $0.01 from loss on dispositions. Adjusted EPS were $0.53, which grew $0.05 per share over prior year.
GAAP cash flow from operations for the quarter was $200 million while free cash flow was $164 million. In comparison to the prior year, free cash flow improved largely due to timing of working capital requirements. During the quarter, the Company used cash to pay $35 million in dividends to common shareholders and $14 million in restructuring payments.
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