- Earnings call transcript Q3 2022

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Operator

Good morning and welcome to the Pitney Bowes Third Quarter Earnings 2022 Results Conference Call.

Your lines have been placed in a listen-only mode during the conference call until the question-and-answer segment. Today’s call is also being recorded.

If you have any objections, please disconnect your lines at this time. I would now like to introduce your participants for today’s conference call, Mr. Chief Ms. and President Lautenbach, Executive Officer; Marc Ana and Mr. Vice President Financial Officer; and Chief Chadwick, Executive Ned President, Zachar, Vice Investor Relations. Mr. Zachar, with will the call Safe Harbor now overview. begin the

Ned Zachar

and just Relations covering future Good bear of manage welcome participation. statements much everyone this information and Ned include appreciate This duties call for morning, few for with to the please Zachar the We calls, everybody. I’d so like the for about program Part financial morning. customary in Harbor Investor to my Included usual Pitney Safe your these forward-looking me Bowes is today's business and I very a minutes. are performance. and presentation and our interest

to from projections. Forward-looking uncertainties risks statements involve and materially results our be that actual cause different could

information are by any non-GAAP www.pb.com obligation XX-K and update Annual used press that also GAAP and that statements our to materials presentation the see uncertainties new and on result For find in in to these in undertake keep you with measures on Report that we in tables at Investor located risks website. our discussed Form do mind please any release our measures press and or the are our the release, release not XXXX Also, more clicking our press about developments. on can SEC as information or appropriate to Relations. of reconciliations our forward-looking for a Please the filed attached other reports earnings website

will many presentation that discuss of we on points have our we Investor summarizes slide call. Additionally, during today’s website a the provided Relations

Marc yours. Officer, Marc, by begin will presentation provide going remarks over Marc. will results. with will Chief President our to followed an like Chief is and financial our floor turn I’d today who Lautenbach, the format be of to Officer, discussion in-depth is to now the our opening which be Chadwick, Financial Ana familiar. Our Executive

Marc Lautenbach

Good continues economy Ned. today’s different morning call. There through Thanks, for our the you and many joining be running to business. and thank currents

the on by second focus most and both currents. these is While are will SendTech resilience third we Ecommerce constant going declined serve this driven The the grew strength Presort forward. resembled and And the In focused the out and on market. businesses of unprecedented well navigating well at very businesses these we very Presort, and Global come our are positioned moment, cross dollar. quarter more many, quarter. probably ways us turbulent importantly, strength even of our the how SendTech of the in currency

As you these all the to the know, businesses that future. are the strong The long-term future. very producers and these and into well growing with cash margins both fact bodes businesses are for close plan reliable today

which business Ecommerce at consumer a our Global unprecedented through a As I dollar, and evolving choppy highs, very mentioned, is behaviors. fighting is retail sector

which to as believe that be customers, market digital a the quarter clients some served as our volumes. weakness will foreseeable hold I see customer's existing offset clear, phenomenon. is stay continue our characterize and in unsettled We will domestic expedited and markets our future. delivery business business the the currency for new to we existing as To in being decline add continue our from the from volume we in

quarter our service to competitors. vis-a-vis direct levels, a regain last since said, ability well the call earnings of on important dynamics our position customers and result Our found third new SHEIN. is ongoing with very win and our third In going signed position USPS forward. income dynamic going the statement. we existing well isn't from is That us customers the new volume on customers economics most our which increased The quarter, important relationship, our have existing have won, customers we us firmed most we that where resolution very our forward

If fourth you're quarter. fashion the the quarter, processing a it substantially tremendously increase exciting in for the is of We volumes started and in is win. to third SHEIN one online This parcels with familiar largest not retailers world. in we SHEIN, the expect SHEIN's

in eBay, We with also North came America terms and to quarter. eBay third the UK

As you Pitney with for decade. probably going important Bowes delighted cannot over has know, eBay an a forward customer been relationship We our more be eBay. to with

label with how to to related shipping we came meaning the enable we for Next, send a shippers through offerings, pay USPS. directly digitally new and based USPS packages our to to agreement

Xst. As call, we the earnings agreements had resellers during USPS ended discussed October the they postage effective last with

with way agreement essentially market. resellers had the that retain structured to a While USPS a not made resellers. successfully we through the USPS In was the earned the economic us to value to we in the the it work market we a that us and concluded economics USPS PB reseller, quarter the for provide USPS forward going the reflecting enables shippers the through in sense

these sustained remained very one well their a we and shipping to gone we we weak to customers quarter resolute. platform. companies might dynamics, future. sustained digital and We're shipping issues USPS these final looming and with the our quick have levels, This the concrete of based team. new evolving, invested We've Others these is is in agreement enable because and most entered kneed platform with recession. A from dynamics. point agreement of our of service our forward. face on PB importantly, our going third we chain largest have see The opportunities into in to continuing forward capabilities, most supply positions we the craft As world able COVID to going perhaps value during but all have invested in We've the our in are consistently these our investment win of this new expand investments an offerings bring. on innovation this potential have example a market network, all

million basically at so you the so a improved X.X holding can began parcels at million Finally, fourth volume parcels X.X quarter our quarter, of X.X driving quarter first parcels third but see the our third we the finished weeks continue week, three approximately improvement, running to and of our steady. build the per quarter service to we per network. per clearly Through week, In the week slight on the million levels are quarter impact at momentum. we

Let me dimensionalize weekly equals further. Annualizing a this XX this volume to parcels increase incremental million million XX year.

we volumes and need We looking our peak what expenditures to in are to have now adding about we compete largely forward capital and A few going baseline. this comments to that expense forward, win markets. new

looking similar To quarter for particular our quarter substantial be success again, conclude, foreshadowed last as the tumult expect Consequently, capital our of is remarks, third confident conservative. quarter, say, As the will financially, Ana but going the in expense expenditures Ana XXXX quarter, I at is outset was bias CapEx. stronger focus our but navigating to call, towards quite won't in financial we I'm metric for have the this and moment expense a headline forward. and business second savings the position mentioned company. on but economic the the at material any third wins my ensuring gross of the back to earnings and come we that the that being more out

Now, let turn to me Ana. it over

Ana Maria Chadwick

such I speak adjusted other Unless basis. on otherwise good as revenue EBITDA everyone. a noted, currency basis an on EPS comparisons you, to EBIT, constant Thank Marc, will items morning and and and

Let's the results. comparison was and the which statements our third start Total high X% versus is for review year-over-year $XXX of revenue level of with quarter financial a million, XXXX. down segment quarter

X% $XXX million decrease. company was Borderfree down Gross margin X%. divestiture, compared period revenue is million the $XXX for the Excluding year, same for a the last to

of quarter a and percent total $XX diluted income $XXX slight down second Interest decreased approximately The XX ago. in was year's from was average the weighted zero year Total $X.X points $XX the EBITDA to Adjusted shares end EBIT million, similar last million. $XX million, basis for year. was $X.XX from outstanding EPS down this compared was level. million of $XX million to was million. provision were from quarter expense prior quarter, At $XX $XX a uptick gross As taxes XX.X%. margin revenues, to million, one million.

to cash was flow in from million was $XX driven quarter changes the primarily XXXX. the use source year. lower differences a flow by to operating were million in cash in source changes quarter in CapEx $XX in to compared were a prior cash the $XX and million of for offset activities working capital an for and of prior net the by $XX lower from quarter Turning down Free of in partially $XX cash was year. a quarter customer deposits. million, third The $XX in income. flow. of GAAP compared Those use a million million CapEx increase

have XXXX domestic have the essentially to our lower substantially of be to fully XXXX CapEx expect out to to now focus we for compared footprint year to continue utilization. maximize that build investment our full shifted and leveraging We completed

in paid million payments. restructuring made we $X quarter, $X dividends million the During and in

at cash of information end. short-term from which at which debt X% Presort Total the is pieces XXXX. billion X.X million summarized following to segment end operating debt Total compared million for I'll presentation, balance $XXX operating in was was last Investor X% was revenues and at Looking quarter press leases million sortation are $XXX $XXX Relations approximately release and on were compared the at million posted quarter, both year. of Presort. end. investments to year sheet, $X.X $X.X volume start cash our were slide year. Adjusted The to billion a $XXX with year billion and our website. compared down our company improvement in prior is

basis line again last a volume to EBIT million, decline basis increased additions quarter piece higher driven improvements was revenue to labor driven progress for gains by change was EBIT margin increased the year. decline transportation methodology, we is largely XXXX. margins XXX third However, revenue is allocation the piece, essentially productivity more quarter which which in improvement previously new per the was refresh. have and in sorter Bottom transportation point a quarter in the and expect XX%, additional year-over-year customer than including ongoing versus per in The XX prior $XX our costs, offset by efficiency declines. quarter from point flat discussed. fourth we and and

seasonal the volumes largely services. usual uptick marketing expect also in related in We

accomplishment equipment team natural the is over SendTech. is XX% for related significant related shipping reported margin which EBIT of quarter Moving Shipping SendTech continues third and will XXXX. and prior from $XXX revenues in In revenues, basis SendTech Margins increase to million $XX SendTech costs margin offset higher fuel introduce of build sales pipeline. a to forward. which points that impacted be which mix price quarter, to of increased was a was XX%, continued lower inflationary we the the increases year, moving and to in select to year, compared a headwinds. quarter, were business revenues now XX% has shipping in revenue. prior pressures $XX year, million a down XX revenues by and growth. response input Equipment segment higher EBIT slight the prior million the versus an

in portfolio revenues. also growth and finance stability driven ongoing in finance lending We and our our well our equipment into business which receivables to by lease strength future continue translate see in bodes for sales,

As excellent. where X% end finance inside headwinds, remain XX-day consecutive assets trends billion, $X.XX under year services remains delinquencies finance the portfolio for and quarter-to-quarter. our see prior Despite we healthy quarter. across of down are credit portfolio. the payment financial XX% macro flat from third Also quarter net the quality

loss Parcel Total Parcel than quarter of segment Ecommerce year million of up negative Global a Global a extent of gross Cross-border. lesser the to for talk was in X% Xst, XXXX. improvement The million more Borderfree, XX% divested by excluding decline to $XXX and Segment contributions decline quarter. on to $XX $XX compared loss Let's from third July driven for offset gross a the X%. $XX Ecommerce. was decreased The year-over-year revenues weakness million digital compared Cross-border Organic lower in lower was million. revenue million which ago. a to Domestic $XX Domestic were break was EBIT year quarter compared quarter $XX the about to the in volumes. in was by a Segment EBITDA million was ago. was in margin even margin

down break currents cross the segment. me inside Let the

macro Compared prior and Additional impacting margins progress gross by negatively Cross-border is of revenues year ongoing in in excess XX%. offset down more Domestic are Cross-border. Parcel to volumes, than trends

on As helping Cross-border you parcels may our focused international recall, U.S. originating the largely move to is business destinations. clients our in

activity. As international we eCommerce weakness, the continued noted in and dollar U.S. on pressure in quarter, last strength to put the macro Europe, especially

to steps a inbound U.S. the launch service. of a taking are from mitigate as the we and the As as tougher result well UK new intra the of Canada, meaningful headwinds, environment, Canada including the services

next. year. the were activity In Parcel inbound to business $XX a quarter, of parcel in down Domestic volumes move million, Lower overall prior million e-commerce Let's volumes continued result decline the softer from China. parcels and $X were from a

up revenues the were parcel. per hand, X% year-over-year other higher On on revenue

$X.XX continue to volumes levels to and last resources been year-to-date, been to Domestic growing has mid a We over XXXX. to in performance against late gross a with to consistently Since in several the per is compared biggest period to volumes years March parcel systems our management It improved our and low from gross priority improved our addressable better has service XX% capital, in resulting the market. the in on-time believe Parcel improved same costs. and lower opportunity, automation significant much facilities. match margin the investment human levels range margin much Despite the more predictable highlight ability large

wins. network Our the positioned this to new new volumes by rate Parcel well third clients have the handle gone parcel peak Domestic client peak. of of recent beginning Since live driven Parcel Domestic volumes year run well XX quarter, in an increase is expected ahead the as as

New clients quarter of volumes. parcel account for roughly are to XX% expected fourth

notable clients Hudson's Japan SHEIN, and Bay, New Crate. include

of as material better Victoria's Supergroup, seeing result clients direct levels, a As existing volumes we from and pickup service are Secret. in BarkBox, such

weekly a seeing over volumes in already to million. the month-over-month uplift XX% are $X.X October. We grown have volume basis On

volumes critical driving are in in increase healthy which the by improvement. margin encouraged are We

in to we mid-September, Parcel volume run levels Network from in materials at annual the year rate As stated expect approximately $XXX our the Domestic $XXX we exit million. to

have Cross-border to expectations year Global EBITDA which for We program. ongoing our the our discussed fourth will USPS EBITDA we both quarter which that This USPS assumes now to generate also reaffirming with pressure exceed historically USPS benefits capabilities arrangements we and agreement the in economics have and ecosystem. our substantial USPS targeting new next. generated reflect discuss full segment we with technology-oriented from were network the the segment innovations are volumes we the finalized built XXXX, CapEx. new The reflects integral that a positive us we the had in possibly USPS will the the and the in quarter. of are shippers. with reseller over reseller years enables Ecommerce supports We improve eBay, maintain Last agreement changes to USPS in and new the to and Also

and to We part have eBay be macroeconomic also we finalized taking international agreement given integral actions continue spend. are pleased a gears, program. Shifting control an the new environment, to shipping current their to we're with of

million be gross annualized We variable against of will expect $XX savings in savings. key to A compensation. generate restoration the headwind this

outlook In year. compared on million the reduce roughly which addition, million perspective let the for to we me CapEx $XX provide by will be expect XXXX lower $XX XXXX levels. Last, to than some XXXX, full

ranges. our full revenue year reaffirming communicated guidance are and EBIT XXXX previously We

to free full our be We SendTech demonstrating business To and quarter, flow positive XXXX. durability recap to well, the for cash year execute continue of the also Presort expect models.

look we by forward Ecommerce which begun generate Global to higher client results volumes. already recent improved For wins, to has driven

year. queue. flow We While the solid your and Operator, to are remain forward capital macro producer considerations, look less open consistent please our appropriate challenging environment. a CapEx, as improvement tackle the year-to-date represent being lower, more prior amounts a expectations of free cash expense a questions. to taxes, We given interest versus working EBITDA committed the we liquidity cash flow with

Operator

from of Ananda [Operator question go come first Please line Baruah. ahead. Instructions] the Our will

Ananda Baruah

for question helpful. metrics, morning thanks and Thanks and incremental context really incremental also new the that's the good here. taking for a the whole It up inquiry guys. opens line Yes, Hey. of

trends Parcels the December I the and how September Q given provided Global the quarter, parcel provided, trends for that the the you what to volume start, with U.S. from at you new then for you just are domestic how So for for guys, Domestic about potential now? you thinking customers year-over-year guess high in contribution -- guys Ecommerce, level year-over-year are

Marc Lautenbach

Great, We're thanks, about October. metric try tremendously increase volume saw the and the Ananda. you to I'm I to the we and excited that found glad helpful those. in we'll continue question appreciate incremental provide

that, if XX think that said, million if of year, a so I parcels to incremental incremental As you see about million you average that's million quickly annualize can contribution margin contribution a EBIT parcel, of XX $XX maintains. an $X.XX

couple which, quarter, dynamics know running two none quarter there's and in anyone, there's least the think that year. the the are of I a through different you Qs of to quarter. better of the to quarter as terms Not than year In

go quarter off the XXXX, in October that last year, port you in to ships Los container were of goods. to circling were of any there waiting a unusual if back plus an which So Angeles was drop hundred sense,

amount it. So fair that consumer angst supply they chain if online, order And a of about obviously from something were added would to a to get they actually worries. perspective

you of year than ships port fast this less the that's is forward five. comparable Angeles If to that number Los circling

what is, last supply So, would was year issues in unusually of very chains. say depressed I unusual because some

all industry the on make of about not sure had we put early, the to only we but labor, top in that that the got probably concern all overstocked the labor of You we that service could participants levels. handle

the retail year-to-year. a are what there's So peak, is at lot is, there's important. of dynamics two quarter say would One looking What dynamics consumer a behavior about I that's that different function of during broadly. I'm happens in fourth the that really and

for dynamic own and So through six bit will That's that Thanksgiving, be before a those quarter. weeks little start think important very its the Christmas. of run that

in business. run of what that of dynamic The to is is rate is October, alluded that and what kind other we the

economics, forward Ecommerce predicated it's the I on but Global think kind ongoing of as volumes. about So volumes, it's going

So that I out with we to, tend peak dynamic. have of to

that's because your to so business going foreshadow run what why million So begins rate it is into that parcels X.X for XXXX. that important is

So the materially. we more which quarter to a it's short your to peak, still now all that right so be peak, hopefully going factor year-to-year the I question it's there, being people normal -- answer think is, on there's and to in is, said, that expect be predicated But helps. in unknowns it's volumes pretty but up mean, some quarter-to-quarter

Ananda Baruah

unpack sort it so And price, context. let's great But can like probably can a there, structure of are be increases the the, some that's of those, you -- it, as underpinnings? would no, sounds prices up it unpack price and increases are just there's sounds for to well? and are and like year-over-year. How Q-over-Q the you spend Yes, -- again moment some the structural are what what the us price

Marc Lautenbach

in are industry sense they the quarter. for structural the They're based that

that So, UPS as extends think zip the for parcel peak. or we the FedEx. and of $X.XX increased next both prices of through that quarter, next get kind year, then there'll And has in into a code be, year, then industry

through We’re that. still working

and FedEx think UPS to been X%. X% increases I have

So industry. the follow we kind tend of to

helps that your question. answer hopefully So

Ananda Baruah

Got it.

that's no, straightforward. very no, and Okay

Let floor. actually here me I just the sneak one cede more in before

On new the sounds you’ve bit to had talked way least a and went a guys you than ring at describing it quarters was, about well, wins. about guys, you new like customer past of way the that the it wins, in that the it

more reached the have mess we more that point just perspective? into critical I’m of is faster, to and more getting a some expect guess, something win something, faster, continue I expect is from you’re so you could tipping you bigger, future and and there this And wondering sort that

Marc Lautenbach

question. Great

a of and wins of probably of So, tired be mean saying the throughout you the wins, revenue tired we’re into the but front these kept hit on got little October, talking Well, integrating saying, of our started in to that in throughout all began see us. talking I I the all our customer year, the material is bit, hearing realized. third of volumes in about them it, had network. I but saw on kept or you got it, the to what a we’ve of quarter, those year wins tired to We was you and little began course bit about network,

degree, the in just talking we’ve So and it’s about, to incremental our and of a continuation wins realization been it’s economics. the network, revenue a the those of what

remarks levels, due all the has her we in the improve said network. improve that’s team before, and customer service that hard done experience Ana As to as said the to with to work

it think didn’t we fundamentals in I we the add economic So strong be it’s, whether our remiss of level the would improvement, service customer And experience that are overall terrific. business improvement. be the very employee satisfaction improvement, I the if think the going that is business forward,

the that’s the that on So, there’s market, now right clearly going really you forward. look if but at fundamentals in drive some that business choppiness underlying going

optimistic. very We’re

and that the we we Likewise, So strong very realized fourth in were the October have the pipeline quarter. saw a revenue parcels wins. in

$XXX million signed that’s we’ve So pipeline. strong a of that got very probably, And we’ve late revenue stage over integration. on a got we’re working

going to or do hard going that in to outrun harder it’s we even the been happen forward. to to achieve domestic us allow what’s while the able to that new the wins going what’s those think dynamics market, So to we’ve predict are international going happen in market,

Ananda Baruah

context. Great

Thank much. Okay, awesome. you so

Operator

Please from Anthony & comes question the Lebiedzinski go Company. of of Sidoti next ahead. Our line

Anthony Lebiedzinski

the trends. Yes, your also taking you providing additional for current good and you thank perspective And for questions. morning, yes, on thank

you about So within guys GEC the headwinds Cross-border. obviously from talked

quarter, Domestic Now Parcel as of the and changes between I obviously guess business imagine mix go would I the into you fourth the that Cross-border.

get see seasonality will the know you XQ wanted to a better being headwind, be given I the of the versus headwind sense do So a business. I still a of but less XQ? Cross-border of in changes it just

Marc Lautenbach

Got you.

Euro. it in and Pound currency vis-a-vis said the the strength dollar is comments, in the particularly I've what’s be causing disruptions, my Cross-border headwinds the to So clear and the

time, we in opportunity Domestic and kind for the said that to the purposes, Parcel business I least continue is that mix to of expect is, so we see over continue will shift. remarks, large my expect it that at think said to Ana As we continue. of What the planning will you

in the see headwinds near future. So don’t I subsiding the

going see think I continue this in rate increases. country, we’re to interest to

Europe lag. think UK and I is likely to

but aren’t see what those over market outruns and overwhelms those you’ll kind to Parcel change, So the is time of dynamics declines. Domestic going

Anthony Lebiedzinski

in obviously, came it, Yes, that. so board And then Okay, sounds clients for the XQ terms the new again, wasn’t thanks GEC, too of on okay. just within it got staying like just much perspective of a benefit, to as client as a business but your saw get what third better curious or I’m of basis you to in the your just as organic far same quarter?

Marc Lautenbach

Yes.

say in So I mirrors was it it in very read I would newspapers. mixed. you mean, what some much ways the

some retailers, are You that that way customers their more handful the kind of we’ve similar. pretty headwinds. got is our say difficult. quite I moment see through some serve, a well. then got got of are working We’ve We’ve doing few others holding that are well, substantial others a and experience experiencing would reasonably

can so is this the it’s I and think the example, to terms in tail, customers network a entire choppiness SHEIN a outrun. at the bit across a what So regardless, are little they hard customer reasonable position kind to of of on perfect we’re base. to But the point new significant provide in of generalize that,

Anthony Lebiedzinski

be and congrats Got SHEIN for certainly valuable a them. on Yes very signing client then you, should it. so

those couple Now, in. just I yes sneak more could a questions, if

you’re to open there? looks like a additional you month acquisitions on Lake doing can and last whether did for comment relatively acquisition small City, you Presort Salt a that in just So

Marc Lautenbach

Sure.

think investor’s I capital So because many know let which speaks up minds. a allocation level, is I to me it of it our take on

flexibility. available that a that we would back not continue in strategic come different to as opportunistic moment. And allocation, economic means contemplate strategic make capital acquisitions you’re you So able to what phrase perhaps practice to flexibility been is have the to I in

So we’d we make to Presort, business. the more are acquisitions or generally because accretive of in instantaneously quickly accretive a actually couple those made like to

pressures pressure that moment decreases competitors the our degree digit to they the on coupled volume need our, densities as that as with Mail five to proper achieve clients of economic order both the So our puts have of to well economics for in business. a First-Class

flexibility, is I continue can of we that forward. durable when our going and in those advantage way in business, about strategic that So talk so invest it’s to moments a take

Anthony Lebiedzinski

Got transportation the the it, any lastly, and as okay. Yes, in third of impact quarter then fourth thanks and costs quarter? as for labor sort expectations And far that. for

Marc Lautenbach

Yes.

to realized. let a because me are So it’s efficiency think that speaks and I about the labor, businesses talk it the interesting little bit

go incremental in defer if adding labor, been GEC, peak. Fast and to is forward particularly board So for more to predictable labor back labor labor we’ve to XXXX. already for for the year XX-months had able, GEC ago you the our accommodate that need because order we peak temp market this on the you in

So but the would first say increase, I thing quarter to the we’re to is, labor in it’s be going last going about fourth later than year.

I job, peak. same has within employees permanent fourth and that about our The to amount second the as of thing efficiency terrific a we into the the network I the been quarter and just would able say, move mean, we and to drive, this speaks GEC team have

same. So think of that as kind of the about

how last able just speaks execute we’re peak, to but to and network will and that number We the out in we the efficiency been of that last also has confident, workers the, temporary more much had with XX year however, drive half months. the

So accommodate the they although that substantially approximately, we weren’t same realized. last in we’re thinking year, planning for less is what were labor order volumes to

labor much the would So subsided. also that increases have say labor at I more the level. market unit efficient

paying we’re wages, healthy last would couple So abated I’ve weeks, I premium the of several sites but in the still say and to of our a good have been touch.

abating. paying see last was I’m So can labor. the not; From you it same weeks don’t ago. in in clearly would transportation And have what of see is I Columbus you but kind in is was is some Baltimore labor in quite our I clearly a sure from would, the it’s and week. there’s pressure a and transportation perspective going a Chicago recession, I couple less afternoon. transportation, I’m we cost as but wages, recession, I costs say good this did of transportation markets, spot unit it’s, a markets, are to not we’re site say the in still

reliable than network. got GEC. in you’ve manage set similar Presort, more in to much the So a dynamics I underlying would economics say of

Anthony Lebiedzinski

Got it. Thank you and of best luck.

Marc Lautenbach

you. Thank

Operator

next Research. Our the Please ahead. Mehta will go line question of come of Kartik from Northcoast

Kartik Mehta

but thoughts morning, good provided lot Ecommerce. wanted little there. bit your of going good there’s seems a Global a I get you lots commentary, on like Marc. I know on Hey, to

You the have the in. U.S. price have headwind, coming customers increases, dollar; you macro new

CapEx about better. maybe managing talked and cost You’ve cuts

you move If for was all the what business? it we that roll now six could forward? where as are be it that you think means all dynamics that ago up, considering May what in profitability that be, happening months do to

Marc Lautenbach

say, I where he are weeks a essence, in were. he ago comments some made Yes, forget would in and important. couple think Gregg of Ned made I Yes, that couple comments I Phoenix, of a

million So the that I the was for the million said first exit into thing I would quarter think that. going XXX parcels volume was to he XXX to XXXX. reaffirm want

upward forward see about that number, we’ll there’s I after weeks. going more bias a probably talk couple think on that we some but more

an minus is say at phrased slight EBITDA issue important and we’re But was question. is, about think and business, between you take would I parcels, of XXX it I million EBIT CapEx so would at most the million this kind breakeven the that to sniff I we how As morning that from starting think XXX it what and of perspective. honest with perhaps

been our building we’re network, done. finished very always so well. managed the I think just It’s of kind of out has CapEx we’ve

that the minus we had don’t for we have is CapEx use in going have but the So past, forward positive. EBITDA CapEx

as positive kind for So cash business. of we flow think position that that of a

for not if an stock, the essence, GEC, or zero holder equity argue in right incremental have option well. move you but valued to at you how valued it’s fairly option in valued which stock it’s the in an now now, But can forward cost. So a that starting you’re is

that option very I value I’m expense shareholder, be I about So dynamic on or that’s important think it, a going think about can so without forward. incremental believe. as a that I realized cost

Kartik Mehta

sequential on jump. Presort business, good a, for then may margin on just use, be And the very quarter good

do what forward, business? at that you And expectations you going in Presort a the think look so, reasonable for is as business margins

Ana Maria Chadwick

the so question. for Yes, thanks

range, EBIT as as said we should before, we that have and we’ve that So, margins are in attaining Presort speak. mid-teens

tend continue with the mentioned Marc we see, been in of Those accretive EBITDA productivity to tuck-in upgrades will investing of that. improvements out be And we And we and are already sorters. have seeing coming pretty will as acquisitions. with quickly. labor that, We the

with So margins the in EBIT we good pretty feel mid-teens.

Marc Lautenbach

I Ana would perfect. I was answer when, the say think

costs think about business. what of investments robotics produce one in Presort we’re it’s if that Global can fully likely we to our out opportunity making that automation automation, can is business? dimensionalized the yet labor Ecommerce, in it haven’t the different take So in you and substantial automation, is robotics that that for So but be

So drive both as there’s opportunities reductions cost all but also particularly from we automation kinds from of conveyor further perspective, innovation more Ana and and sorter deeply, for robotics. a as said,

Kartik Mehta

Perfect. appreciate Thank it. both. I really you

Operator

go Swope ahead. Our next question of Baird. come will line from the Please of Matt

Matt Swope

switch over and for guys going have second. you could guys. bond how you are morning to deal Ana, your if that Maybe maturity this on a talk I you to capital good the thoughts with Yes, XXXX could that? about structure

Ana Maria Chadwick

Sure.

watching. know, first we’re the in all as and closely all, So, monitoring of and markets we unsettlement there’s capital meant

On the to event were from, we that other course, have options and we that are secured unsecured the capacity be several unsettled. cash other generate on we revolver exploring side, the to everything that of markets cash in hand that have will

evaluate progresses. time have So we comfortable, and we alternatives as feel pretty several to that we continue

Matt Swope

sales did Are that could with like what you there? additional asset a help possibility Borderfree,

Marc Lautenbach

asset is going more an we those will us, to types divestitures. certainly to would of Listen, say long-term What to somebody be I it right what I’ve is portfolio. is, than if worth else the consider in my I said asset sales now is about like

Matt Swope

And enough don’t to to that point, liquidity feel that? do pressured you that you and other about good options feel your

Marc Lautenbach

in I’ll answer absolutely. one word, that

Matt Swope

the could remind overview, current rate how may Bank. that interest even be if of That’s happens a deposits press reconciliation a free the one you broader flow the what at environment in in there’s today, the add-backs be back bank? Can helpful. And is probably with to just -- Pitney a And Bowes us one Bank? bit little to nitty-gritty PB the of more the works little give you may release us benefit larger and customer the there a change then Ana. is cash a In for

Ana Maria Chadwick

Sure.

why the reason of where is meters. to a to there carry these take a have let’s to seasonality The are a reduction usage. complexity is on spike. because deposits fund we a of the no step these at primary bank. a of deposits model somewhat So And we interest around of historically seen quarter have is back we it the meter why and see business meters we out that of facilitate what deposits little our Most close bit have third the

to It’s have of role rates you not in business all deposits. historically any due some model So significant meters. I facilitating hope interest played the perspective. that around mainly gives our the

Matt Swope

definitely securitize in there you the back And ability question, given any those any to receivables Not how bad. is is otherwise financing -- a we’re as the monetize helpful. about market? said such finance is to to those, That part, different or capital there receivables

Ana Maria Chadwick

mean we we question I will one and and going a it’s to that forward. assess assess, Yes. continuously continue great

Matt Swope

Okay, great. Thanks guys.

Operator

And the Tim of Corporation. ahead. line question Please go Call come will Management The our from Capital next of

Tim Call

fixed have locked market maturities wondering Hi, and that so rising in debt and or rate you interest expense? your interest I interest the fall with whether income was make the expense will will interest interest with net and your increases, it alone that rates

Ana Maria Chadwick

business, that interest we’ve pressure roughly So there’s our that upward seen let back. instruments as are good fluctuations, we XX% rates. a us position In me fixed our a have which and step in to debt we finance gives take

looking adjust So as -- then, maturities will and to forward. expense come, our debt of interest the course, be going we

Tim Call

the you earnings? billion $X.X go at a would bonds cash discount now And trading discount? significant over to back with could be right buy at a par, accretive that the And and debt to short-term and market XXXX to out

Ana Maria Chadwick

and a doing be It’s that constantly ongoingly. And we our allocations. question, will evaluate we capital good very

debt different make cash. aware the sure between the well of where have very uses we are we right the So of is to trading, and trade-offs we’re looking

Tim Call

you setting the on last this hard of be quarter, appears company Well, up fourth different clients congratulations all fourth winning success, you’ll thank that quarter critical for this very take for in to than advantage and work. might that it fourth especially in the be it, quarter, so

Ana Maria Chadwick

you. Thank

Operator

our go like remarks. I turn back would CEO, to now conference and President to Please for sir. any ahead, the over Mr. closing Marc Lautenbach

Marc Lautenbach

capital Thanks. several that positioned transformed profits just of tremendous folks. capital they’ve the last years, but realizing our whether issues debt, be top with, about what the cash you over just structure questions it kind certainly or I’d it the growth, are lost company so the contend line or itself by revenue last talk so like doesn’t couple or has the employees. take of forward, good for to And way to top be the the SendTech network had thanking been going that, from a around stabilized transformed to repositioning lots a They matter, shouldn’t think business which, and business as have flows as our we in a not work is hard structure. itself. last has work that a to the of think and fact business of our that us, for to and quarter, is important but just not didn’t model, on fintech all, important SendTech’s conclude have entire and as in -- different on as COVID chain repositioning itself, supply today at anyone revenue lot growth done line happen terrific and that lost important about without but degree, we such stabilization We the circling business sign, about I’ll so of

are that like and satisfaction. fundamentals business. business with you, happening I I to products, our of in There’s has a of What the quarter, model, to is, hard been levels. quarter see like working environment, I lots right variables. negotiating be of I those tell what’s knows. coming so and with fourth period So of now, in moment, the place. what of kind moment different hard but just confident out And stronger overly I the to in I in is that quarter continues think like service a indicative that fourth have predictions. what’s But not moment or of economic speak happening in this our with in works our happening out not who the is the said, all we’ve way whether with our it’s been precisely we the customer we this of third and the engagement. what durable listen, our much employee you our offerings, that rather be saw signs the focus with will strength like all it’s an our achieve. to uncertain being the

team doing, as here I we we’ll we’ve of you So, say update and couple have go more we’ll to through quarter. see more. and conferences the know the that we as are Ned got a

a part we peak But and that our are function said, in ones which We moment in the a the there. of going important than love fourth positioned some currents. I As is volumes of is exciting really more It’s for wins, are peak, the time. different consumer two going-forward indicative there are is rate GEC, quarter behaviors, like economy somewhat the is the customer really pipeline. and what in we’re how which

attention you We’ll for your morning. soon. So, time talk and thank this

Operator

panel, Ladies call for today. day. Have participation and wonderful conclude using today’s you thank in a gentlemen, third thank for earnings On like that service. call, behalf conference our does and you for of quarter today’s our we’d to your teleconference

now One please. may moment, disconnect. You

Pitney Bowes (PBI) 1 Nov 222022 Q3 Earnings call transcript