PBI - Earnings call 4 2023 | Pitney Bowes Inc.

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Operator

Good morning, and welcome to the Pitney Bowes Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Today's call is also being recorded. [Operator Instructions] I would now like to introduce participants on today's conference call. Mr. Jason Dies, Interim Chief Executive Officer; Ms. Vice Chief Executive Mr. Officer; Chadwick, Maria President Financial and and Ana Landler, and Relations President, Strategy. Philip Investor Global Vice Mr. Landler will now harbor safe begin the call with a overview.

Philip Landler

I calls. my duties Philip for covering the Investor I'm Thank information include program, manage for harbor us. these Relations of morning. Bowes the part Good and safe Pitney Landler. joining you

about business and financial So let in that. Included future cover today's presentation our me briefly are forward-looking statements performance.

undertake projections. More materially used information in uncertainties that to these could actual by attached different our discussed press Forward-looking new from can appropriate tables information involve in to located be on Investor mind our obligation reconciliations our XXXX to the uncertainties statements a our risks non-GAAP not our GAAP for and and report Form in you presentation statements are in and Also XX-K, the with measures clicking filed on materials, do we measures result in that earnings about any as the reports release, release. results risks keep are cause website that press the or found of our annual www.pb.com to be can forward-looking find other SEC update or and press Relations. Please release developments. at

call Finally, segment over the and I'd to we Dies. information CEO, presentation to have historical like Interim provided spreadsheet on turn with a slide now our website. And Jason

Jason Dies

ongoing call your the Good joining investment interest morning, in and you thank Bowes. and and Pitney for

senior in and at the set team have strategic my a of management work the the assessment and has working operational increased with Bowes. Later importantly, XXXX. priorities spent these shareholders my of core and valuable to and our feedback about future days, reinforce and key we're Board the develop Over getting I'll challenges discuss opportunities the input viewpoints This past my to a address. Most lot our call, I've conversations time here of optimism the XXX Pitney stakeholders. for from helped

but well each high-level at today our adjusted across this We as segments. of me start growing restructuring cost level have QX increasing enterprise on after a progress by the At targets performance giving our are and our reduction track of last quarter, original $XX work Let EBIT to good still efforts overview as with level, year. million year-over-year, the enterprise made do. we late

enabling expansion, well reduction show We overall result segment efforts grew profitability, a are actions. more the cost Ana quarter. as margin SendTech provide these up will revenue executed investments and meaningful capabilities, gains seeing recorded the shift and These work to from quarter, in towards which benefit potential. are EBIT and simplification detail. SendTech us resources and in the gross in of and Presort growth Presort team. the of see profitable testament EBIT ever grew in great the highest shipping where is a its our to long-term we

volumes of We year-over-year will a Ecommerce to support the capabilities million XX% peak demonstrating create parcels. basis. and value value sequentially, profitability continue quarter and Parcel in segment. Global to to capitalize on go-forward this grew improved client fourth our delivered our on excellent Domestic and in network operational XX

the actions our the of to and realize PB dedication this holiday continuing throughout teams to their review are take to segment. year. thank in I'd We value to serving like all the and season the for of options clients

build strategic I operational momentum and and help Next, that current in XXXX a and continue to spend the on to us priorities want will beyond. transform minute outlining

throughout program announced XXXX. savings increasingly reduction continue will we organization cost. realize streamline the and yield cost to these reduce we in XXXX, The to started previously we to First, and expect benefits

to the restructuring ways will we are look side, additional continue we efficiency. Although for to on target on increase

into more driving accountability businesses. our we're Second,

to changes organizational have also how to addition we structure. in operate and we In and some important measure overall performance, our changes initial made

have of marketing We segment to focus. under functions improve the integrated majority our leadership

combining globally have in our for and Shemin responsibility full XX execution also geographies strategy SendTech who are will Nurmohamed, under We worldwide.

capabilities Third, focus new we and better develop SendTech's to focused growth. SendTech client that prioritizes library, product create launched sheet. balance on are create and strengthening technology since realigning GEC's synergies drive technology we on includes innovation leverage moved drive SendTech. and effective a will shipping improved manage To disciplined business accelerating X will more global recently and and options. digital go-to-market offers as specific value in this multi-carrier existing we and resources with assets shipping combined January to solutions that That shipping and in growth our end, API year, shipping, client carrier into to of development engineering upgrade This ones. channel our one efficiencies additional an capital our digital and model we're Also, having experience. Fourth, allocation our

that investors. In cost our of execute we Bowes. about and and corporate balances realized in I efficiencies, Pitney As capital interest allocate to on closing, lies quarter to in, am manner long-term asked reductions continue we what unit near-term for a plan X ahead business

Bowes change our now will with over which to ahead and detail. we it very increased like As XXXX XXXX intensity our also I for more bring to the significant have. results a I'd into shift path. transformation, accelerate XXXX, QX prioritize positive. And We actions and turn operate will to was in be discipline in we expect continue operational shipping year Ana to targeted understand of additional we Pitney and opportunities discuss to challenges support and the look growth that

Ana Chadwick

Jason, in can noted, commentary quarter. an to as currency items you, constant EBIT, my cash will XXXX additional and in Thank otherwise EPS year the good morning, speak flow and on press basis a results found our revenue everyone. other performance such fourth free I be I adjusted release. comparison Unless focus will Full and and basis. comments EBITDA, on on the financial

the loss higher $XX a improvement prior quarter, the to EBIT $X.XX year. GAAP of of $X.XX mostly $XX offset the EBITDA an includes Ecommerce Adjusted decline million GAAP of million, noncash by charge higher in also goodwill an was $XXX year. EPS million a X% prior $XXX revenue $X.XX $X.XX versus foreign related was total currency For was was year-over-year. restructuring Global to improvement was a interest in includes EPS charge quarter. expense. $XX prior year. and on and EBIT than million, charge versus loans. was segment. related $X.XX a GAAP impairment $X.XX EPS intercompany EPS loss noncash million

which year. dive growth line. compared X% the of Let's million solid $XXX SendTech, had especially quarter, quarter, revenue reported on down bottom on business in EBIT X SendTech of our a the into segments. to prior X%

secular on in our to and base experience where our As extensions meter dynamics we given cycle. shift in towards an life increasing revenues. are previously continue declines near-term pressure product discussed, putting Both lease we are

quarter, This of that proportion had XX% related a shipping revenues equipment in-period transactions X% high revenue. now declined SendTech's total year Prior professional and large of services shipping-related of included revenue. and couple comprise a

Looking beyond fourth made sustainable new single The quarter of enterprise we our quarter transactions, these terms subscriptions. meaningful in implementing shipping was progress biggest in growth.

well our portion revenue grew shipping high We about of solutions. from client Our provide workflows. come confident enterprise level offerings high the the quarter. products often business these in with to potential shipping XX% that a our implementation recurring multiple as new the are of The of leading integrated the remain early future SaaS for bodes transactions systems shipping complex of solve capabilities days, revenue. Though subscription into growth

are Jason key in As X we mentioned, making changes areas.

investment leveraging when shifting our First, this effective and earnings second, go-to-market. to change we leadership, SendTech, our Global solutions development quarter. financials the more report moved are we we be next our resources shipping product January shipping streamlining for in And digital to X, go-to-market. Segment will new Ecommerce recasted

new We the migration even this low- product base were and stage continue along to for the transactions. lease fixed-term extensions we new lease to our At USPS we see compliant mid-volume products. refresh year-end, through XX% of further migration, with more the continue and technology. At versus

have investment of a the will net perspective, revenue receivables, be from the shift continue extension. will we term to lower lease financial finance a offset From net lease positive a of generally clients. impact near-term pressure As sales, payments over equipment margin we as financing in this by on the reminder, monthly higher cash spread receive while is this

financial XXXX. more We on play expect in meaningfully out this dynamic to performance

move we incorporated in cancellation refresh, past dynamics which line just I expect rates, is with shipping uptick and migrations. The lease long-term in into product of mentioned, our an later our planning. as more we have growth, the addition, In been extensions stages X cancellations experience into during product higher our

improved by by margin driven expanded both and line. X% Moving EBIT items. $XXX points were business margin as driven more both in streams. Higher improvement. basis and services, equipment margins primarily gross points, million, gross margin to result mix expense gross equipment of attractive and financing XXX of improvement. are the margin EBIT a by basis bottom revenue Segment higher-margin which XXX improvement SendTech was a gross X

First, supply have chain in lower we implemented several and resulted that earlier year improvements production transportation this costs.

the in comes we quarter, complex mix margin which a a sold and higher often of with installed equipment, more profile. top-of-the-line Second, higher

expense. Moving to operating

also of Our our improved bottom line. a simplify as of are efforts. the efforts restructuring revenue a primarily business points, benefiting SendTech's and to basis streamline percent SG&A XXX as result

services important net SMB year-over-year previously client remains on our dynamics $XX last Promoter product Services in driving receivables cycle in in is steady solutions our Finance receivables XXXX, X% moment spend business, providing the Of inside and client net basis. receivables life lease interactions SendTech. improvement client the continue saw Net a the also We receivable more processes, a returns. declined performance in lower-cost the of while which Within portfolio, financial million grew of of largest $XX experience. with $X million, improving loan or client we million, modernize component to an I to explained. the note, grew Score channels line year-over-year valuable the Financial and on decade. I'll

is enterprise also will offerings. announced bank the portfolio receivables our overall. in our lease progress the to We low quality and that continues the Delinquencies initiatives to our and of good roughly continue of for make captive quarter-over-quarter. both program durability participating select to continue be on where The be the bank write-offs previously financing and and of demonstrate flat and health our

the in was piece Next, revenue per higher and year, and by pieces. million a X-digit which focus quarter, store was mail result class revenue to growth X% to higher let's driven operational grew up and mix per turn EBIT segment Presort from revenue excellent another million on of quarter. more prior Presort, qualification. Adjusted continued versus pricing, XX% Revenue X.X $XX piece sorted had excellence. attractive better billion $XXX

X% labor prior labor the our labor we Our to drove in which new measure specifically, more and track productivity annual wages. More per investments improvement is along drive a productivity. continue hour, offset in to efficient we process pieces with management, year-over-year increase automation, in fed use

can we across to further that Looking automation our forward, scale pilot continue we technology productivity. to new and improve labor network

the which addition, team year, optimized costs In our transportation has year-over-year. our over past routes, transportation lower helped

and Let's Cross-Border the year to of in Global progress occurred The execution significant revenue down Ecommerce. million, shift change reflects $XXX to a performance Where the cost was on Segment management. year-over-year X% first peak drag in versus our that be compares. prior year. half continues relationships client in in

this, service Specifically, compares improvement, Volumes cost. Domestic by December. Despite fluctuations reflects Cross-Border expect we Higher being and challenging on the team million. either to million, fluctuated performance followed in a in fixed to XX $X sustained, or while needs with leverage revenue both Friday Parcel softer on respectively. and peak manage the last quarter the market. better Cross-Border grew and profit these surge effectively volumes second and basis. volumes gross parcel has overall a X in pre-Black sequential declined compared than quarter to $XX delivered XXXX. in volume missed million grew service competitive and the $XX we to ability Domestic Parcel the a progress XX% normalize expected profit year-over-year cost profitability resulted gross of during predictable since quarter million in cost our where levels, still stabilized,

continued route and we volumes costs XX%. As the pricing revenue offset piece lower optimization, less per drive partially declined costs low. Unit are peak planning, surcharges unit higher result from expect as evidence Better helped per we Better prices as a the transportation to improvement. by a lower move much of lower out in this first seasonally X%. be declined utilization be quarter this across benefit The excess to revenue also market industry. perspective of piece. Altogether, peak, challenging by capacity, fuel remains peak

the EBIT. parcel mix and in improved to expenses But per the market, revenue higher client segment $XX Beyond million. to Parcel loss a EBIT a million reduction from past change headwind the Domestic mentioned, the as $X Lower drove Cross-Border remains of offset continued and declined in piece. Adjusted $X cost partially year-over-year, economics client operating operating improvement due to X million to initiatives taken by Important quarters. that primarily we're note over drag relationships. expenses

restructuring. meaningful annual plans We million end on In run to on enterprise-wide are $XX million on realized progress deliver Moving savings. made XXXX. track communicated quarter the XXXX, previously to the we rate to in of reduction our and by savings cost $XX $XX in million

plan cost reminder, business, unallocated impacts including the all segments a X expenses the As across corporate. and and

cash year. Turning lower benefit GAAP activities quarter million $XX on basis to flow. due and $XX were last to from cash million. working year-over-year capital flow in a was a cash free primarily operating the large Both was figures

to During debt. $X the quarter, we $XX million paid reduce in dividends and million

conclude strategy. I'll mentioned, my with As and on perspective remain capital XXXX. remarks a allocation disciplined Jason focused we on a balanced

growth and to range flat a year-over-year remain to revenue margins relatively to flat single-digit from a EBIT low basis. decline We on expect

benefit from and in our further on cost company-wide savings in taken plan. the XXXX as incremental the execute reduction expect we XXXX actions from program We annualized

We base, we expect and dynamics explained expect meter of restoration I our product timing and growth. and revenue to the of gains. Within our inflation wage to due life variable cycle previously to decline the EBIT SendTech, partially compensation around shipping offset

to of its and performance year strong Ecommerce, to value as continue a to EBIT slightly take segment. team to the this up Presort the we be Following to strong flat we in continues we expect XXXX, revenue as expect Global to actions Within execution. performance improve and optimize realize relatively

quarter margin levels solid expenditures as quarter lower at interest capital and let to me improved soft Domestic expense Global similar than a Ecommerce in our team's to pass XXXX, expect elevated Jason. fourth of the the quarter through XXXX. To and its remain excellence in and bottom the and Presort back we fourth XXXX call XXXX, Parcel testament around operational and a dedication was meaningful focus line were both SendTech and that, on in in expansion which Finally, volume hard incurred level grew market. a to rate work. delivered close, simplification. With

Jason Dies

Ana. Thanks,

Before to Board moving Jill Sutton to of Bill Directors. welcome to like formally our and I'd Q&A, Simon

have seen and I last continue to corporate counsel and areas their regarding move our as as Jill changes Bill in Board. brings forward. insights and announcement allocation, You look and such an we Pitney governance, to night may to capital experience transformations significant forward Bowes

next also will Mary in take I her She May, of X that come. over As on Chair. with months for governance reelection on Board X been the the not this opportunity an important stay we've strategic on Directors to during let's will continued Pitney announced hand the progress will steady years her enhancements stand the she part forward that I we Board announcement, thank look personally and that, years, as for Mary with Board actions build over and Q&A. until period to past has open change overseeing but that the many contributions of expect put Guilfoile company line Chair the a then. to for work for has her made. And continuing footing to Bowes would leadership and to to for of stronger like to

Operator

Instructions] We'll Mehta Kartik to Northcoast [Operator go with Research.

Kartik Mehta

wanted little Global the I insight bit a to Ecommerce more into get business.

more it to you it driving you to progress is becoming of competition wondering, more making more get because Or making a function costs and as now increase? trying price control And there. good You're move volume? piece per of about into efficient XXXX, I'm the revenue sure is

Jason Dies

for the as it's things. with you multiple always, I mean, say look, Kartik, question. I'd thank GEC,

drive need for pushing management to a the we've cost now. that continue First while been to off, we

see last $X over the started to we in the improvement really few the fourth in out I'll you management an months. kick cost year-over-year. call think in quarter, million in I particular, saw OpEx

and continue, to focused team going is on that that. So the is

a in to Second, a that add as in driving done way that couple of XX% repeatedly, again we focus industry. in in volumes the increase course was volumes year, good year, job in quarter need job over most we the to of the important network. did you've of from drove especially in good past Last to heard network, margin years. Parcel what Domestic the volume quarter. fourth a down peak us We've We of the the continue the the over that a for XX% into on an fourth

on So that that in margin the price has equation the always your yielding to rate market that to for piece say, And I per few be getting focused we're to going we're point, and forward. market. the be of then a on focus past will the in that particular, and the part us again. And shifted to and would margins we've we're months, a more in focus a over probably continue the

Kartik Mehta

comparison Ana, just what are cash for free you did maybe XXXX, in in your flow expectations what XXXX? to

Ana Chadwick

Yes.

that So the you million, Nothing $XX-some our we we we'll and be somewhat next year. saw, believe but significant, of north. that as believe free for north flow, somewhat cash we delivered

Kartik Mehta

just And question, last Jason. one

you be happening Obviously, XXXX. talked an sales. wondering, equipment transition in I that of on I'm the expectations of the business impact little anomaly an little And what's you of that hard, the about this is if look and know would of couple it's trends have 'XX, a a Just but bit as kind at if is your continue. will bit over next 'XX and a years, for

Jason Dies

Yes.

with the specifically about I the business, equipment. You're think, SendTech talking

Kartik Mehta

I Yes, Yes, yes. apologize, yes. yes,

Jason Dies

Yes.

an most in as portfolio. about the I are know, look, end our So before, tail talked and of through IMI we've of mean, as we you migration

middle think the and of get that So range, end low done you the the to about range year. the if of this has

platform. new the to clients those move to have We

the the of time which year. have products, the more last end announced we at and beginning of on end We the on higher top

We're to really of term. that for a continue talked to that to us have for continue point going So the can very long now effectively. We've we the locking positive we're extensions migration. truth we're use revenue extensions IMI those about the in before, is in the to going where the lease on focus impact to drive overall start value at lease

to your transition will bit point, So XXXX, be a a of period.

move that As opposed equipment new those moving off recurring extensions make equipment go it will you those little new to is us see lock the we and XXXX, more strengthen going equipment but see different finish start one as our from and lease placements, as forward in existing to portfolio, revenues. bit of ultimately to portfolio, a for us to

Operator

Lebiedzinski we'll next, And go to Anthony Sidoti. with

Unknown Analyst

is wage for Guillaume on my the All right. you can This talk higher expected variable impact ] and [ inflation in XXXX? Stephan question guess compensation first Lebiedzinski. Anthony of I about is, the

Ana Chadwick

Yes.

take the Thank that. I'll So question. you for

enabled as that X% we of somewhere is, general, full $XX we're market and mentioned paying labor has our so seeing hourly board. we're that anticipate to in everybody And committed and pay versus those seeing, I on what not on. different that in we've and our the which increases, in salaried exit aspects is anticipate $XX this market, savings increase the so. And of rate year, we But around performance will wage be million us there So seeing. that as the very to we're across The And consumed do portion terms XXXX. average, we vis-a-vis at the market are in are had we employees of are as compensation variable we here significant between observing with restructuring activities. million we a

Jason Dies

I look, continue this productivity continue mean, it to out. incumbent us on say just drive is to cost specifically, I Well Yes. to drive to

to balance it's right that but have that labor going run to going equation to of is you're the make business, larger that to something a adjust part getting know to You talent we're forward. and going continue to sure you're the

Unknown Analyst

is, you of are this plans you like And my question terms, announced in as capturing what baseball that as terms last the far use next of in year, to benefit cost-saving the structuring? innings

Ana Chadwick

question. Great Yes.

end in announced first program our background, -- So just quarter we first at announced of the the we quarter call. back earnings the

And execution. you quarters upped we've we So as had last number. of that recall, X quarter,

would very along of the based commitment, our obtaining say we are confident So far we're delivering on and we're that. pretty glide we feel And where I with path.

will We As our done. mentioned, further market. to the to unturned, remain we're cost. look optimize to Jason never any for competitive and stone need not in continue We're we leaving activities

Jason Dies

analogy, Yes. in back your late we're I'll baseball go the innings. to

impact execute actions in benefit I XXXX. activities full for and So us. significant we all will on that start need realize a executed. the already tell materialize have saw to have that of restructuring that to acted system QX of of you plumbed late we in being throughout savings and to we And our yield the been that stages the to

Unknown Analyst

search And the on last one update that, can me for is an process? provide CEO the you

Jason Dies

November time, be was their formed X-person Look, search I the that I Yes. earnings what in clear I that, fulsome will a seek some take go ranked believe I to process going months, a and We that is going nationally that they said that X we're that, right So on last the to take say moment firm window. Board and and appropriate so right? expected think, the said through. went using call, process off to at early was committee candidates. on call, to the We to in has X was in and that announced, Board

Operator

go can we with Swope Baird. Matt next, And to

Matthew Swope

Ana. and Jason

dollar to the dollar? of the So inflation wage year-over-year in whole flat for you've and effectively margin offset comp guidance for the to cost Ana, the the company savings that you mentioned variable essentially the gave increase will sort be

Ana Chadwick

Yes.

to let minute So me here. add for a thinking that

So we digits. to in potentially the down flat mentioned revenue low single

extent the drives component revenue we that have any to leverage need that, a we that also address. pressure, to remember So that

So the mentioned. that say I components would it's I just X

Matthew Swope

maybe that decline chance margins, XXXX. Ecommerce especially that in that again, EBITDA in feels EBITDA you're XXXX had might be started be Global hoping there GEC major -- positive We Is any any like positive. Specifically about chance saying saw there looking XXXX? EBITDA Ecommerce, Global you at could a it what in But no. there is

Ana Chadwick

Yes.

free our feel that intent and happen. add. will it's to we closer to continuing and Jason our closer that, and hard absolutely it are start milestone. to very goal, call on get to It's me let when So Listen,

and As you the variables the know, in, hard to really and dynamics we're pressure market that there's a pricing it's lot just of market call.

Jason Dies

let I'm think say to comment a that of look, just go mean, additional performance We're I've jump through here. rate a financial on in we've going is specifically me the the Matt, in. we lined GEC up we're couple with where now going from as got Yes, to points not past, I said not we happy of XXXX. point view. of

made look, operational I earlier. The that we've can from but one outlined tremendous point addition think thing in we're we at the those looking of that make are I progress to would answers. still an and is, the have not we're and to maximize enough to of all view, executional value ways we business, sure necessarily I know going a few smart always say of the

the party actions outside. Are that are in at my say should open philosophy ways to We look we've on levers we the broader bringing the and looking a third a as all looking just got there management personal with ideas help in And be work reflects to third I'd we accelerate team certainly have brought should at at? from that the in a we us party statement, to be place.

outside over to of pair GEC place, and only going the me I in think investors analysts past the is in to you've eyes. seen not months. And from an frankly, bring X talking that we're

bank, us for doing always the is stack, at out debt optimize going you we're we and certainly GEC our for As about potentially how about to place looking differently opportunities to ideas think that. good we're one look be

Matthew Swope

that anything about profitability Or thinking? the of what will and -- say business mean shipping why Is shipping that will that on that this you're change piece give into its -- color EBITDA of is positive? that is can more that there of and doing financially? the so How own? SendTech, moving us that part Is you GEC on you could GEC any

Jason Dies

Yes.

the but said I let go reiterate I And to strategic So in point it of it's I it. opening, a and think from me important, view. want first

and from portfolio in us. As about we have the Bowes, the that of the have of still going that front opportunities you forward Pitney think getting leverage for one assets is the across we offerings

So obvious from one moving the SendTech GEC digital sense. things those solutions was just made that to of business

technology, think business, the is and of producing If GEC that It the labels. and digital the side you on for about actually that they shipping business the do team transactions focused capabilities SendTech. is powers the it of both that a

So it is of a business. more SaaS-based

so to of the term, that you our And space. in look in bringing the going continue us is off, think the which and go-to-market really technology SendTech go-to-market sense going that at those long to offerings One, as reasons. to the synergies they in made we're bring organization, allows shipping. of of SendTech It as it that more us will we focused to shift teams a we a there to more and the leverage range of create get are And development over the together together bunch for part very to way. pay I allows think,

Ana Chadwick

let sizing me of add maybe Yes. few And the opportunity here. a additional

and will next we quarter, but total revenue. provide color put X% the revenue, on around to it's in more lot of a perspective, shift Ecommerce So it Global

idea an of that. you gives it So

as terms In the margin. that mentioned, gross healthy SaaS-like. a And of margin that, gross Jason this that has brings, very very is

to our Now engineering look gross expense the have we margin, and focused to that we more leverage base support around product as in development. our terms of are

perspective So gives a hopefully, dimensionalizing you the size. on that

Jason Dies

it reason move, refocuses the team excited our making on no sure than the are looking other Matt, about for I'm very at offerings. that we actually

the Do under these We additional the opportunities? I sense the SendTech world are looking umbrella just they at we them think the together And can it assets leveraged. best technologies be that in we digital monetizing have are in have our we made all to correctly? bring where portfolio,

Matthew Swope

digital Was over? Would be piece the it. finance move positive EBITDA Ana, will sorry that moves XXXX? that that myopic of to solutions part on business the in

Ana Chadwick

just as So I to relates of mentioned, Ecommerce. is to as the understand X% The Global it revenue. it's your question shift,

expense, the margin, mentioned, we it carried, believe healthy gross I yes, So do we that but jointly. better as optimize also we can as

terms of the say of size wouldn't relative So I in business, anything Ecommerce the it's Global impact significant. on the

Matthew Swope

guess us I if would the Well, Okay. could new you pieces. helpful. be the like I'll guys when of give is what segment sort just highlight the you under reclassified financials ask That would very numbers have looked past

Ana Chadwick

absolutely do that quarter. the do as what we full We'll in we release first will a the segments. of is earnings recast That between

Matthew Swope

night, just Hestia. agreement the press last for if I'm I And about changes on cooperation -- the could. me, what agreement you that elaborate last new sorry, entails, with you Board one Could release one In cooperation mentioned Jason? the the

Jason Dies

Yes.

actually, Let the me -- I question. appreciate

into back me night Let that first color kind Bowes I'd put Pitney that with and and step in say thing great the announcement. on And position some context. a some actually is announcement of that last is

would with Board skills of the this And at day, in search successful experience the new X our during had end so time transformation. they boardroom. Board about for, through our expect, that active the pretty board governance, company the firm That them now And things process. brought change. that the that it to and on Board forward. can Board composition specific and with I members we part who recognized allocation, of The particular the criteria given sets of along as that wealth a Board clear. of lead process might and engaged was nationally around specifically, have bring search a The was you corporate how talk and The a those we were do capital expect we refreshment. skill ongoing they regularly you and firm looking enhance skills As candidates management experiences partner best and went

of to shareholders we we as continuing one our largest The the make changes that also make committed and of move second clear support half forward. need is to we have

us of win-win a And forward the conversations. are importantly, that transformation I lot most for starting pursuing about is a that making it's our And about it's alignment by And we're building the that that the talking changes the progress saw of are the we've signal shareholders. made about the So about confidence we're here. I've And certainly you and in that a as strong past to in a right in and get path last and now. results investors the team right year, reflective with management that months progress the all I excited confidence hope those signal see the and front to talked opportunities announcement more night of here. strong X undertaking. that of past the we're stakeholders us I'm the importantly, evidenced can of over the

to drive So fully and value, this I we what all forward. the Board we the on to the have and move say need the making will to are need to is thing, shareholder at same we changes I make committed that end,

Matthew Swope

helpful, Jason. That's

Just up. one sorry, one, last as I wrap

You mentioned disciplined guys more capital consider dividend? you cutting Would the allocation.

Ana Chadwick

in So And X bring into capital terms take allocation. back of buckets. step let I'll a me of kind it

mean first generation foremost, know, increase about, as our cash the you And and you flow profitability, and of program to generation. As our increase capital. our restructuring different we've talked things

more optimize and have build Second we we priority focused we've is instead about to business, of and the CapEx investing talked and construction. CapEx, our in

providing the shareholders. At at which end, X, is -- I how the really to the But with to those decision. say mentioned that moment, in would is the order a we that have out conversation lastly, on our have all continue not way is paydowns, think to capital to the return just and also is that's That and about we current. we additional sources Board So let those it the prior order And 'XX I Board. but it. a go we're periods. Debt of upcoming on focused vis-a-vis reduction, maturities some intent

Jason Dies

we just and mean and to allocate dividend thought we're was the term frankly, as capital, them. to ways we and effort both and need maximize I'll you talk a in the we short priorities going what to term. our Board. into And to say about signal heard put -- Matt, point And we shareholders, this about both externally year of in that we a put in to for to also the to signal, reaffirm how internally as need look think continue all sure that teams make long return our that of we differently get morning. one Clearly, is strategic me the I a I capital that's did will out, with of there this and allocation something lot And for I my

Operator

[Operator Instructions] Sakon We can to next Peter go with CreditSights.

Peter Sakon

as sure segment. for this is needs reviewing options evaluation? about I'm talk that realize company For to hard talked to to in the the of the the to specific up the to an wait and the get months, press Board on? to new be do something about and it's for this you of wait members CEO value this something Can that mentioned, to announced GEC, need And number release, we'll you timing? then Is put new a speed but

Jason Dies

of of year, our term, X the we of And again are clear. redoubled our So of months We're sure have, make all We're have going to on over kind past those have beginning, look, tell on to be continue the it's to of the make focus XXX% and I ways We at to said all value is on operational is, the provide that we you to we disposal to actions we that that clients of successful deliver I network the By work a volumes the the services get we've better a we volumes clients been and the right for value clients to the the able from point is sure driving provide. from when we network. extracting statement that and in we're comes to driving are the we we in sign our we way, making there to market. And I into think, them. would growth Volume do we've will a this meaningful provide past the value with the continue GEC that taking for We've let's out what X to on been at then waiting short try value not strong over the right? we that been business. fact along that finally, to have tools that efficiencies. actions continue looking impact I realize fact into business. What offerings anything.

on clear, managing So I forward. progress we're and supportive there needed a GEC of in move things There's waiting try it's said, a nothing hesitation that's our anything thought that of I start make to the and any me lot in continue that lot or of forward. work. GEC. be anyone or at the the is that to is we leadership to there to That alternatives to ball want a Board as don't and look to have juggling sense but move has team But been want as we

Peter Sakon

I said it, churn, and you're Did decline. if increased how with revenue you that maybe and SendTech, much XXXX? say On decline missed the EBIT to will, you you in expecting

Ana Chadwick

Yes.

take So that. let me

X happening. about inside talked we SendTech So of dynamics

decline. as the First, declining widely mailing and population know, we stated, it's our as of meter we normal have part all

is expense What The leases, and is that second a working our more, dynamic extending shift. of term coming be what we've put revenue. And we issued be to the about not as an we margins. of product of but of shipping way cost important anticipate emphasis it XXXX but around new revenue part we year, where a about now and is and those timing. for third extensively new think new our really combined, we're ago, I issued is to we're talked it. and for side out When that dynamic putting the leases our And the OpEx product that we our X transition of do that are timing then having across We to hard is the put This those out. keep lot about the all from a trajectory anticipate reduction, you grow shifts does on I anticipate years EBIT the our shipping. renewals growing board,

Jason Dies

go of Peter. -- Yes. What I'll say, Peter, I'm ahead, yes, softer kind

Peter Sakon

if say, question. my rephrase can would I I

be said will what you up. in to was, reasons of hear My segment? At For decline. And a why. Presort, or do very the the on what's slightly revenue to going in of XXXX EBIT magnitude you I important EBIT flat, this said that is for percentage expect decrease you decline EBIT SendTech, the question you the

Ana Chadwick

But to EBIT overall margin the being revenue a will Listen, well overarching SendTech what we the you have I will in that digits envelope. statement of you tell flat each inside comment that Yes. I you down maintaining relative that not to single specific in our segment. the of made around size low is gives perspective as as

Jason Dies

with business years the and jump tends this cycles business, just more quarters on I'd you, various remind of Yes. SendTech right? lumpy Peter, we with cycles, around IMI various deal to SendTech is other a sales. say, migration. deal I just its And in than lease what I'd any lease about mean very based and nature equipment we

could on outperform that's you distort a business I things. What transaction, continuing continue have success. and you think that focused going to So a are we is large quarter that market we you should that have reposition to where in to long-term business, the equipment be and will for

than will quarter-to-quarter, The general the -- might is pockets trend others. outcomes So why same. of different there be some be better

shifting that repositioning we opportunity going much business business. of are We are us going to market, basis, and that forward. ahead into perform provide We're new which growth

Peter Sakon

for give I be amount year do that the will typical question same per on investments? the a same, spending the how heard is last the the think -- the period us basis? et same will my this segment CapEx. Can be cetera? amount you will SendTech, you And long Great. And for then regarding that is you payback but say GEC, your allocation

Ana Chadwick

Yes.

So take let that. me

steady. that around the level overall, will at company So $XXX pretty million stay overall

We of a Global that will reduction X see a Ecommerce bit in other segments. to shifting the

on quicker talked one we more on this long-term discipline, IRR, terms In payback but and the are priorities our and not in of Jason the more focused about paybacks. terms of of periods, only key

times, very evaluating payback. all looking inside the So on well into as at we're less business, that really focused we're we we're making than are And the X-year payback. that than thoroughly investments X-year less the

and as our that more forward. we decisions more see you'll make of So go here

Operator

to call Dies And Mr. closing any the comments. back hand over for I'll

Jason Dies

said, market the pursue expectations, way term the short Presort Ana actions And we that is going has to and of market appreciate you want on going and as continues And want our I from leader. kind continue capitalize of in to I proven should has can our to drive of And in you efficiencies model Look, We're to specifically not the them. that GEC needed to each to a that mine. above many lot be potential, SendTech, is as as across drive of is, the that bunch in reflecting a we're final a even perform actions organization. work, questions. just in on that. walking certainly point. shipping away opportunity to business. a taking above And that this although take to we're domestic changes performance. clear heard, see to Yes. the that potential. We make one call growth BUs I make

will So thank with think I say you that, I questions. for your

have our and prioritize We ahead mentioned outset, accelerate I challenges we intensity front at the Pitney in the actions support the importantly, And as operational to growth opportunities and well that with operate lies to for as XXXX, we're going continue As to to discipline to targeted am optimistic going continue we we're Bowes. path. shift us. also of look the in that increased I understand about ahead what as shipping

we to forward talking end at quarter. and look to you close, the first will of I that, with So

Operator

ladies gentlemen, conclude and for for today. for participation your that and call Thanks teleconference. AT&T our using does And

You disconnect. may now

Pitney Bowes (PBI) 1 Feb 242023 Q4 Earnings call transcript