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Pitney Bowes to Take $250 Million Charge for Transistion to Networked Postage

Press release from the issuing company

STAMFORD, Conn., June 14-- Pitney Bowes Inc. today unveiled its plans to transform the global mailing industry by developing a networked platform for its mailing systems. The information capture and exchange made possible by advanced technology, turns the postage meter into an "intelligent'' terminal that networks the mailer to postal and carrier information and systems. This two-way information architecture, in turn, enables convenient access to and delivery of value-added services such as tracking, delivery confirmation and rate information to name a few. The company's plan to transition to this next generation of mailing technology will result in a pre-tax charge of between $200 - $250 million in the second quarter. This non-cash charge is primarily related to the assets associated with our non-networked mailing technology including lease residuals, rental assets and inventories. The move to expand this innovative architecture globally will enhance the value we provide to our customers and Posts according to Michael J. Critelli, chairman and chief executive officer, Pitney Bowes Inc. "We recognize that Posts around the world are looking for ways to deliver value to our mutual customers and grow revenues in product areas in which they have significant potential competitive advantage. With better real-time information about mailing usage and patterns, Posts around the world will be able to offer new services, increase operational efficiency, and grow revenue. Our intelligent systems such as the DM200 and DM300 make it possible to cost-efficiently deliver value-added services which save mailers time and money. Thus, our deployment of networked technology is good news for global mailers and Posts alike. "There are several factors which indicate that now is the time to take these actions. We expect that expanded access to technology as part of the recent settlement agreement with Hewlett-Packard will enhance our ability to move to networked products. We also expect the U.S. and Postal Services around the world to continue to encourage the migration of mailing systems to networked digital technology. This networked platform will also facilitate access to many of the existing and future products and services unique to Pitney Bowes. When combined, these factors reinforce our commitment to expand our networked product line, and extend this valuable platform and related services worldwide.'' Pitney Bowes consistently leads the global mailing industry in innovation, and is currently slated to spend over $120 million in research and development this year.