STAMFORD, Conn. — (BUSINESS WIRE) — August 2, 2012 — Pitney Bowes Inc. (NYSE: PBI) today reported second quarter 2012 results.
Revenue for the quarter was $1.2 billion, a decline of 5 percent when compared to the prior year. Excluding the impacts of currency, revenue declined 3 percent and benefited from growth in the International Mailing, Software and Mail Services segments. The Small and Medium Business Solutions (SMB) segment’s revenue streams continued to decline. Though the Production Mail and Management Services segments also experienced revenue declines, both saw improving revenue comparisons against the prior quarter on a constant currency basis.
Earnings per diluted share for the quarter, on a Generally Accepted Accounting Principles (GAAP) basis, were $0.50 versus $0.49 per diluted share for the prior year. Earnings per diluted share for the quarter includes a reduction of $0.03 per diluted share for costs associated with debt management, including the early redemption of $400 million of bonds originally scheduled to mature later this year.
Free cash flow for the quarter was $301 million, while on a GAAP basis, the company generated $274 million in cash from operations. In comparison to prior year, free cash flow was favorably impacted primarily by the timing of working capital payments. During the quarter the company used $84 million of cash for dividends and reduced debt by $578 million. The company did not repurchase any of its shares this quarter.
Commenting on the quarter, Chairman, President and CEO Murray D. Martin said, “During the quarter, excluding the impact of changes in currency, Software and Mail Services revenue grew. Additionally within our SMB business, International Mailing revenue grew year-over-year.
“There are drivers, particularly in the Enterprise group, that we anticipate will moderate year-over-year revenue declines in the second half of the year, as compared with the first half of the year. These drivers include expansion of ecommerce and direct mail opportunities in Mail Services, new print outsourcing services provided by Management Services and increased backlog of equipment orders for Production Mail. During the quarter, we signed a strategic partnership with ORION Holdings to provide print management services that create sustainable cost savings and increased value for the global network of Interpublic Group’s agencies and clients.
“We also continue to invest in our digital based communications services and we have now signed more than 50 large third-party mail service providers who will offer the Volly™ secure digital mail service to more than 6,000 companies and consumer brands.
“During the quarter we continued to enhance our operational efficiency and invest in growth opportunities. We also strengthened our balance sheet through the early redemption of $400 million of debt.”
Business Segment Results
The company reports its business segments in two groups based on the customers it primarily serves: Small and Medium Business (SMB) Solutions and Enterprise Business Solutions. The SMB Solutions group consists of the company’s global Mailing operations. The company aligns its SMB business segments into North America Mailing and International Mailing to reflect how the business is managed. North America Mailing includes the operations of U.S. and Canada Mailing. International Mailing includes all other SMB operations around the world. The Enterprise Business Solutions group includes the company’s global Production Mail, Software, Management Services, Mail Services and Marketing Services operations.
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SMB Solutions |
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| 2Q 2012 | Y-O-Y Change | Change ex Currency | |||||||
| Revenue | $619 million | (8%) | (5%) | ||||||
| EBIT | $190 million | (6%) | |||||||
