PITNEY BOWES INC /DE/ [PBI] Filings

10-Q 1 pbi-20240630.htm 10-Q pbi-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission file number: 1-03579

PITNEY BOWES INC.

(Exact name of registrant as specified in its charter)

State of incorporation:

Delaware

I.R.S. Employer Identification No.

06-0495050

Address of Principal Executive Offices:

3001 Summer Street,

Stamford,

Connecticut

06926

Telephone Number:

(203)

356-5000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, $1 par value per share

PBI

New York Stock Exchange

6.7% Notes due 2043

PBI.PRB

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

As of July 23, 2024, 179,509,852 shares of common stock, par value $1 per share, of the registrant were outstanding.

PITNEY BOWES INC.

INDEX


		Page Number

Part I - Financial Information:

Item 1:	Financial Statements

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023	3

	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2024 and 2023	4

	Condensed Consolidated Balance Sheets at June 30, 2024 and December 31, 2023	5

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3:	Quantitative and Qualitative Disclosures about Market Risk	39

Item 4:	Controls and Procedures	39


Part II - Other Information:

Item 1:	Legal Proceedings	39

Item 1A:	Risk Factors	39

Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3:	Defaults Upon Senior Securities	40

Item 4:	Mine Safety Disclosures	40

Item 5:	Other Information	40

Item 6:	Exhibits	41


Signatures		42

PART I. FINANCIAL INFORMATION

Item 1: Financial Statements

PITNEY BOWES INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue:
Business services	$	506,666	$	473,497	$	1,042,263	$	996,988
Support services	94,012		103,315		190,345		208,599
Financing	67,539		66,702		135,202		133,751
Equipment sales	72,753		79,451		150,156		162,061
Supplies	35,509		36,505		72,230		75,340
Rentals	16,691		17,011		33,483		34,280
Total revenue	793,170		776,481		1,623,679		1,611,019
Costs and expenses:
Cost of business services	429,756		410,638		876,123		856,955
Cost of support services	31,664		35,018		64,719		71,858
Financing interest expense	15,965		14,763		32,568		29,299
Cost of equipment sales	50,314		56,180		102,873		113,351
Cost of supplies	10,358		10,884		20,553		22,109
Cost of rentals	4,433		5,142		9,117		10,570
Selling, general and administrative	220,008		222,549		436,205		464,669
Research and development	9,108		10,274		18,589		20,767
Restructuring charges	31,843		22,443		36,158		26,042
Goodwill impairment	—		118,599		—		118,599
Interest expense, net	28,767		22,920		56,533		45,262
Other components of net pension and postretirement income	(382)		(1,751)		(769)		(3,461)
Other income	—		(228)		—		(3,064)
Total costs and expenses	831,834		927,431		1,652,669		1,772,956
Loss before taxes	(38,664)		(150,950)		(28,990)		(161,937)
Benefit for income taxes	(13,797)		(9,415)		(1,238)		(12,665)


Net loss	$	(24,867)	$	(141,535)	$	(27,752)	$	(149,272)



Basic net loss per share	$	(0.14)	$	(0.81)	$	(0.16)	$	(0.85)



Diluted net loss per share	$	(0.14)	$	(0.81)	$	(0.16)	$	(0.85)

See Notes to Condensed Consolidated Financial Statements

PITNEY BOWES INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited; in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net loss	$	(24,867)	$	(141,535)	$	(27,752)	$	(149,272)
Other comprehensive (loss) income, net of tax:
Foreign currency translation, net of tax of $(158), $403, $(654) and $576, respectively	(5,018)		9,193		(20,417)		20,080
Net unrealized (loss) gain on cash flow hedges, net of tax of $(559), $125, $(972) and $(562), respectively	(1,676)		375		(2,917)		(1,687)
Net unrealized (loss) gain on investment securities, net of tax of $(8), $(415), $(312) and $612, respectively	(25)		(1,322)		(992)		1,950

Amortization of pension and postretirement costs, net of tax of $1,654, $1,223, $3,282 and $2,365, respectively	5,007		3,739		10,048		7,228
Other comprehensive (loss) income, net of tax	(1,712)		11,985		(14,278)		27,571
Comprehensive loss	$	(26,579)	$	(129,550)	$	(42,030)	$	(121,701)

See Notes to Condensed Consolidated Financial Statements

PITNEY BOWES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in thousands, except per share amount)


	June 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	590,147	$	601,053
Short-term investments (includes $1,752 and $2,382, respectively, reported at fair value)	21,852		22,166
Accounts and other receivables (net of allowance of $10,079 and $6,139, respectively)	266,172		342,236
Short-term finance receivables (net of allowance of $14,418 and $14,347, respectively)	541,957		563,536
Inventories	76,500		70,053
Current income taxes	7,850		564
Other current assets and prepayments	101,263		92,309


Total current assets	1,605,741		1,691,917
Property, plant and equipment, net	359,452		383,628
Rental property and equipment, net	22,334		23,583
Long-term finance receivables (net of allowance of $8,341 and $8,880 respectively)	625,734		653,085
Goodwill	727,613		734,409
Intangible assets, net	54,339		62,250
Operating lease assets	297,638		309,958
Noncurrent income taxes	58,063		60,995

Other assets (includes $209,711 and $227,131, respectively, reported at fair value)	327,488		352,360
Total assets	$	4,078,402	$	4,272,185

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	843,148	$	875,476
Customer deposits at Pitney Bowes Bank	628,711		640,323
Current operating lease liabilities	61,143		60,069
Current portion of long-term debt	57,290		58,931
Advance billings	86,339		89,087
Current income taxes	1,556		6,523


Total current liabilities	1,678,187		1,730,409
Long-term debt	2,065,034		2,087,101
Deferred taxes on income	193,835		211,477
Tax uncertainties and other income tax liabilities	14,538		19,091
Noncurrent operating lease liabilities	263,758		277,981
Other noncurrent liabilities	290,939		314,702
Total liabilities	4,506,291		4,640,761

Commitments and contingencies (See Note 13)

Stockholders’ deficit:
Common stock, $1 par value (480,000 shares authorized; 270,338 shares issued)	270,338		270,338

Retained earnings	2,948,959		3,077,988
Accumulated other comprehensive loss	(865,523)		(851,245)
Treasury stock, at cost (91,217 and 93,972 shares, respectively)	(2,781,663)		(2,865,657)
Total stockholders’ deficit	(427,889)		(368,576)
Total liabilities and stockholders’ deficit	$	4,078,402	$	4,272,185

See Notes to Condensed Consolidated Financial Statements

PITNEY BOWES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in thousands)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(27,752)	$	(149,272)

Adjustments to reconcile net income or loss to net cash from operating activities:
Depreciation and amortization	81,613		79,770
Allowance for credit losses	9,087		7,164
Stock-based compensation	6,567		6,075
Amortization of debt fees	6,167		4,413
Gain on debt redemption	—		(3,064)
Restructuring charges	36,158		26,042
Restructuring payments	(26,697)		(12,883)
Pension contributions and retiree medical payments	(17,300)		(25,196)


Goodwill impairment	—		118,599

Other, net	5,558		7,564
Changes in operating assets and liabilities, net of acquisitions/divestitures:
Accounts and other receivables	68,922		67,506
Finance receivables	42,412		3,837
Inventories	(7,068)		(9,065)
Other current assets and prepayments	(12,902)		(1,561)
Accounts payable and accrued liabilities	(49,336)		(108,836)
Current and noncurrent income taxes	(33,142)		(27,903)
Advance billings	(1,958)		(22,948)


Net cash from operating activities	80,329		(39,758)
Cash flows from investing activities:
Capital expenditures	(41,093)		(54,646)
Purchases of investment securities	(19,909)		(9,973)
Proceeds from sales/maturities of investment securities	36,377		12,088
Net investment in loan receivables	(3,892)		(14,835)



Settlement of derivative contracts	—		6,185
Other investing activities, net	804		485


Net cash from investing activities	(27,713)		(60,696)
Cash flows from financing activities:


Principal payments of debt	(28,266)		(53,803)
Premiums and fees paid to redeem debt	—		(4,464)
Dividends paid to stockholders	(17,785)		(17,525)
Customer deposits at Pitney Bowes Bank	(612)		52,348

Other financing activities, net	(14,144)		(9,109)
Net cash from financing activities	(60,807)		(32,553)
Effect of exchange rate changes on cash and cash equivalents	(2,714)		4,730
Change in cash and cash equivalents	(10,905)		(128,277)
Cash and cash equivalents at beginning of period	601,052		669,981


Cash and cash equivalents at end of period	$	590,147	$	541,704

See Notes to Condensed Consolidated Financial Statements

PITNEY BOWES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)

1. Description of Business and Basis of Presentation

Description of Business

Pitney Bowes Inc. (we, us, our, or the company) is a global shipping and mailing company that provides technology, logistics, and financial services to small and medium sized businesses, large enterprises, including more than 90 percent of the Fortune 500, retailers and government clients around the world. These clients rely on us to remove the complexity and increase the efficiency in their sending of mail and parcels.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In addition, the December 31, 2023 Condensed Consolidated Balance Sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. In management's opinion, all adjustments, consisting only of normal recurring adjustments, considered necessary to fairly state our financial position, results of operations and cash flows for the periods presented have been included. Operating results for the periods presented are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2024. These statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report to Stockholders on Form 10-K for the year ended December 31, 2023 (2023 Annual Report).

During the first quarter of 2024, the Company identified an error and recorded an out of period adjustment of $5 million to correct the understatement of revenue in prior periods, of which $4 million originated in 2020 and prior. The impact of the adjustment is not material to the consolidated financial statements for any interim or annual periods prior to 2024 and is not expected to be material to the 2024 annual period.

Accounting Pronouncements Adopted in 2024

Effective January 1, 2024, we adopted ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The transition to new reference interest rates required certain contracts to be modified. The adoption of this standard did not have an impact on our consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires additional transparency for income tax disclosures, including the rate reconciliation table and cash taxes paid. This standard is effective for annual periods beginning after December 15, 2024. We are currently assessing the impact this standard will have on our disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires enhanced disclosures about significant segment expenses and information used to assess segment performance. This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently assessing the impact this standard will have on our disclosures.

PITNEY BOWES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)

2. Revenue

Disaggregated Revenue

The following tables disaggregate our revenue by source and timing of recognition:


	Three Months Ended June 30, 2024
	SendTech Solutions		Presort Services		Global Ecommerce		Revenue from products and services		Revenue from leasing transactions and financing		Total consolidated revenue
Major products/service lines
Business services	$	33,651	$	146,858	$	326,157	$	506,666	$	—	$	506,666
Support services	94,012		—		—		94,012		—		94,012
Financing	—		—		—		—		67,539		67,539
Equipment sales	20,932		—		—		20,932		51,821		72,753
Supplies	35,509		—		—		35,509		—		35,509
Rentals	—		—		—		—		16,691		16,691
Subtotal	184,104		146,858		326,157		657,119		$	136,051	$	793,170

Revenue from leasing transactions and financing	136,051		—		—		136,051


Total revenue	$	320,155	$	146,858	$	326,157	$	793,170

Timing of revenue recognition from products and services
Products/services transferred at a point in time	$	71,694	$	—	$	—	$	71,694
Products/services transferred over time	112,410		146,858		326,157		585,425
Total	$	184,104	$	146,858	$	326,157	$	657,119


	Three Months Ended June 30, 2023
	SendTech Solutions		Presort Services		Global Ecommerce		Revenue from products and services		Revenue from leasing transactions and financing		Total consolidated revenue
Major products/service lines
Business services	$	25,341	$	143,107	$	305,049	$	473,497	$	—	$	473,497
Support services	103,315		—		—		103,315		—		103,315
Financing	—		—		—		—		66,702		66,702
Equipment sales	19,060		—		—		19,060		60,391		79,451
Supplies	36,505		—		—		36,505		—		36,505
Rentals	—		—		—		—		17,011		17,011
Subtotal	184,221		143,107		305,049		632,377		$	144,104	$	776,481

Revenue from leasing transactions and financing	144,104		—		—		144,104


Total revenue	$	328,325	$	143,107	$	305,049	$	776,481

Timing of revenue recognition from products and services
Products/services transferred at a point in time	$	73,495	$	—	$	—	$	73,495
Products/services transferred over time	110,726		143,107		305,049		558,882
Total	$	184,221	$	143,107	$	305,049	$	632,377

PITNEY BOWES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)



	Six Months Ended June 30, 2024
	SendTech Solutions		Presort Services		Global Ecommerce		Revenue from products and services		Revenue from leasing transactions and financing		Total consolidated revenue
Major products/service lines
Business services	$	66,176	$	316,665	$	659,422	$	1,042,263	$	—	$	1,042,263
Support services	190,345		—		—		190,345		—		190,345
Financing	—		—		—		—		135,202		135,202
Equipment sales	45,665		—		—		45,665		104,491		150,156
Supplies	72,230		—		—		72,230		—		72,230
Rentals	—		—		—		—		33,483		33,483
Subtotal	374,416		316,665		659,422		1,350,503		$	273,176	$	1,623,679


Revenue from leasing transactions and financing	273,176		—		—		273,176


Total revenue	$	647,592	$	316,665	$	659,422	$	1,623,679

Timing of revenue recognition from products and services
Products/services transferred at a point in time	$	148,159	$	—	$	—	$	148,159
Products/services transferred over time	226,257		316,665		659,422		1,202,344
Total	$	374,416	$	316,665	$	659,422	$	1,350,503



	Six Months Ended June 30, 2023
	SendTech Solutions		Presort Services		Global Ecommerce		Revenue from products and services		Revenue from leasing transactions and financing		Total consolidated revenue
Major products/service lines
Business services	$	49,289	$	302,009	$	645,690	$	996,988	$	—	$	996,988
Support services	208,599		—		—		208,599		—		208,599
Financing	—		—		—		—		133,751		133,751
Equipment sales	39,055		—		—		39,055		123,006		162,061
Supplies	75,340		—		—		75,340		—		75,340
Rentals	—		—		—		—		34,280		34,280
Subtotal	372,283		302,009		645,690		1,319,982		$	291,037	$	1,611,019


Revenue from leasing transactions and financing	291,037		—		—		291,037


Total revenue	$	663,320	$	302,009	$	645,690	$	1,611,019

Timing of revenue recognition from products and services
Products/services transferred at a point in time	$	150,559	$	—	$	—	$	150,559
Products/services transferred over time	221,724		302,009		645,690		1,169,423
Total	$	372,283	$	302,009	$	645,690	$	1,319,982

PITNEY BOWES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)

Our performance obligations for revenue from products and services are as follows:

Business services includes fulfillment, delivery and return services, cross-border solutions, mail processing services and shipping subscription solutions. Revenues for fulfillment, delivery and return services, cross-border solutions, and mail processing services are recognized over time using an output method based on the number of parcels or mail pieces either processed or delivered, depending on the service type, since that measure best depicts the value of goods and services transferred to the client over the contract period. Contract terms for these services initially range from one to five years and contain annual renewal options. Revenue for shipping subscription solutions is recognized ratably over the contract period as the client obtains equal benefit from these services through the period.

Support services includes providing maintenance, professional and subscription services for our equipment and digital mailing and shipping technology solutions. Contract terms range from one to five years. Revenue for maintenance and subscription services is recognized ratably over the contract period and revenue for professional services is recognized when services are provided.

Equipment sales includes the sale of mailing and shipping equipment, excluding sales-type leases. We recognize revenue upon delivery for self-install equipment and upon acceptance or installation for other equipment. We provide a warranty that the equipment is free of defects and meets stated specifications. The warranty is not considered a separate performance obligation.

Supplies includes revenue from the sale of supplies for our mailing equipment and is recognized upon delivery.

Revenue from leasing transactions and financing includes revenue from sales-type and operating leases, finance income, late fees and investment income, gains and losses at the Pitney Bowes Bank (the Bank).

Advance Billings from Contracts with Customers


	Balance sheet location	June 30, 2024		December 31, 2023		Increase/ (decrease)
Advance billings, current	Advance billings	$	78,471	$	82,124	$	(3,653)
Advance billings, noncurrent	Other noncurrent liabilities	$	409	$	507	$	(98)

Advance billings are recorded when cash payments are due in advance of our performance. Revenue is recognized ratably over the contract term. Items in advance billings primarily relate to support services on mailing equipment. Revenue recognized during the period includes $60 million of advance billings at the beginning of the period. Current advance billings shown above at June 30, 2024 and December 31, 2023 does not include $8 million and $7 million, respectively, from leasing transactions.

Future Performance Obligations

Future performance obligations primarily include maintenance and subscription services bundled with our leasing contracts. The transaction prices allocated to future performance obligations will be recognized as follows:


	Remainder of 2024		2025		2026-2029		Total
SendTech Solutions	$	127,844	$	222,057	$	350,923	$	700,824

The amounts above do not include revenue for performance obligations under contracts with terms less than 12 months or revenue for performance obligations where revenue is recognized based on the amount billable to the customer.

PITNEY BOWES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)

3. Segment Information

Effective January 1, 2024, we moved the digital delivery services offering from the 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.

Our reportable segments are SendTech Solutions, Presort Services and Global Ecommerce. The principal products and services of each reportable segment are as follows:

SendTech Solutions: Includes the revenue and related expenses from physical and digital shipping and mailing technology solutions, financing, services, supplies and other applications to help simplify and save on the sending, tracking and receiving of letters, parcels and flats.

Presort Services: Includes revenue and related expenses from sortation services that qualify large volumes of First Class Mail, Marketing Mail and Marketing Mail Flats/Bound Printed Matter for postal worksharing discounts.

Global Ecommerce: Includes the revenue and related expenses from consumer logistics services for domestic and cross-border delivery, returns and fulfillment.

Management measures segment profitability and performance using adjusted segment earnings before interest and taxes (EBIT). Adjusted segment EBIT is calculated by deducting from segment revenue the related costs and expenses attributable to the segment. Adjusted segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, goodwill impairment charges and other items not allocated to a particular business segment. Costs related to shared assets are allocated to the relevant segments. Management believes that adjusted segment EBIT provides investors a useful measure of operating performance and underlying trends of the business. Adjusted segment EBIT may not be indicative of our overall consolidated performance and therefore, should be read in conjunction with our consolidated results of operations. The following tables provide information about our reportable segments and a reconciliation of adjusted segment EBIT to net income or loss.


	Revenue
	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
SendTech Solutions	$	320,155	$	328,325	$	647,592	$	663,320
Presort Services	146,858		143,107		316,665		302,009
Global Ecommerce	326,157		305,049		659,422		645,690
Total revenue	$	793,170	$	776,481	$	1,623,679	$	1,611,019


	Adjusted Segment EBIT
	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
SendTech Solutions	$	100,967	$	96,848	$	202,245	$	192,485
Presort Services	27,048		20,429		67,377		47,334
Global Ecommerce	(30,935)		(37,483)		(66,362)		(70,655)
Total adjusted segment EBIT	97,080		79,794		203,260		169,164
Reconciliation of adjusted segment EBIT to net income or loss:
Interest expense, net	(44,732)		(37,683)		(89,101)		(74,561)
Unallocated corporate expenses	(51,275)		(47,709)		(101,045)		(104,058)
Restructuring charges	(31,843)		(22,443)		(36,158)		(26,042)
Goodwill impairment	—		(118,599)		—		(118,599)
Proxy solicitation fees	—		(4,538)		—		(10,905)
Gain on debt redemption	—		228		—		3,064
Foreign currency gain on intercompany loans	712		—		5,350		—
CEO and Board transition costs	(2,631)		—		(2,631)		—

Strategic review costs	(5,975)		—		(8,665)		—
Benefit for income taxes	13,797		9,415		1,238		12,665


Net loss	$	(24,867)	$	(141,535)	$	(27,752)	$	(149,272)

PITNEY BOWES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)

4. Earnings per Share (EPS)

The calculation of basic and diluted earnings per share is presented below. The sum of the earnings per share amounts may not equal the totals due to rounding.


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:




Net loss	$	(24,867)	$	(141,535)	$	(27,752)	$	(149,272)
Denominator:
Weighted-average shares used in basic EPS (1)	178,696		175,695		177,872		175,094





Basic net loss per share	$	(0.14)	$	(0.81)	$	(0.16)	$	(0.85)



Diluted net loss per share	$	(0.14)	$	(0.81)	$	(0.16)	$	(0.85)

Common stock equivalents excluded from calculation of diluted earnings per share because their impact would be anti-dilutive:	7,128		11,426		7,204		9,833

(1) Due to the net loss for the three months ended June 30, 2024 and 2023 and the six months ended June 30, 2024 and 2023, an additional 2.4 million, 3.7 million, 3.5 million and 4.1 million, respectively, of common stock equivalents were also excluded from the calculation of diluted earnings per share.

5. Inventories

Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) basis, or net realizable value. Inventories consisted of the following:


	June 30, 2024		December 31, 2023
Raw materials	$	22,565	$	21,201
Supplies and service parts	27,491		25,522
Finished products	26,444		23,330


Total inventories	$	76,500	$	70,053

PITNEY BOWES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)

6. Finance Assets and Lessor Operating Leases

Finance Assets

Finance receivables are comprised of sales-type lease receivables, secured loans and unsecured loans. Sales-type leases and secured loans are financing options for the purchase or lease of Pitney Bowes equipment or other manufacturers' equipment and are generally due in installments over periods ranging from three to five years. Unsecured loans are revolving credit lines offered to our clients for postage, supplies and working capital purposes. Unsecured loans are generally due monthly; however, clients may rollover outstanding balances. Interest is recognized on finance receivables using the effective interest method. Annual fees are recognized ratably over the period covered and client acquisition costs are expensed as incurred. All finance receivables are in our SendTech Solutions segment and we segregate finance receivables into a North America portfolio and an International portfolio.

Finance receivables consisted of the following:


	June 30, 2024						December 31, 2023
	North America		International		Total		North America		International		Total
Sales-type lease receivables
Gross finance receivables	$	975,820	$	124,799	$	1,100,619	$	987,743	$	143,466	$	1,131,209
Unguaranteed residual values	37,395		6,566		43,961		38,059		7,211		45,270
Unearned income	(258,941)		(38,599)		(297,540)		(253,711)		(42,847)		(296,558)
Allowance for credit losses	(13,096)		(2,285)		(15,381)		(13,942)		(2,786)		(16,728)
Net investment in sales-type lease receivables	741,178		90,481		831,659		758,149		105,044		863,193
Loan receivables
Loan receivables	324,939		18,471		343,410		342,062		17,865		359,927
Allowance for credit losses	(7,221)		(157)		(7,378)		(6,346)		(153)		(6,499)
Net investment in loan receivables	317,718		18,314		336,032		335,716		17,712		353,428
Net investment in finance receivables	$	1,058,896	$	108,795	$	1,167,691	$	1,093,865	$	122,756	$	1,216,621

Maturities of gross finance receivables at June 30, 2024 were as follows:


	Sales-type Lease Receivables						Loan Receivables
	North America		International		Total		North America		International		Total
Remainder 2024	$	188,619	$	41,375	$	229,994	$	202,892	$	18,471	$	221,363
2025	317,823		39,138		356,961		44,977		—		44,977
2026	238,192		24,029		262,221		30,891		—		30,891
2027	149,506		13,319		162,825		24,404		—		24,404
2028	69,320		5,532		74,852		15,975		—		15,975
Thereafter	12,360		1,406		13,766		5,800		—		5,800
Total	$	975,820	$	124,799	$	1,100,619	$	324,939	$	18,471	$	343,410

PITNEY BOWES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)

Aging of Receivables

The aging of gross finance receivables was as follows:


	June 30, 2024
	Sales-type Lease Receivables				Loan Receivables
	North America		International		North America		International		Total
Past due amounts 0 - 90 days	$	966,927	$	123,377	$	323,006	$	18,360	$	1,431,670
Past due amounts > 90 days	8,893		1,422		1,933		111		12,359
Total	$	975,820	$	124,799	$	324,939	$	18,471	$	1,444,029

December 31, 2023

Sales-type Lease Receivables

Loan Receivables

North
America

PITNEY BOWES INC /DE/ [PBI] Filings

PITNEY BOWES INC /DE/ [PBI-PB] Filings