STAMFORD, Conn. — (BUSINESS WIRE) — November 1, 2012 — Pitney Bowes Inc. (NYSE: PBI) today reported financial results for the third quarter 2012.

Recent Highlights

• Revenues of $1.2 billion; Adjusted EPS of $0.47; GAAP EPS of $0.38
• Reaffirms full year 2012 guidance for the following:
  • Revenue in the range of flat to -4%, excluding the impact of currency;
  • Adjusted EPS guidance in the range of $1.95 to $2.15;
  • Free cash flow in the range of $750 - $850 million.
• Updates GAAP EPS guidance to a range of $1.78 to $2.08, which includes new impairment and restructuring charges.
• Significant progress on expanding our participation in higher growth cross-border ecommerce parcel opportunities, including, a broader strategic relationship with eBay to provide ecommerce shipping solutions beginning in the 4^th quarter.
• Decision to exit the International Mail Services business focused on delivering mail and catalogues internationally, in line with the focus on higher growth cross-border ecommerce parcel opportunities.
• Year-over-year growth in Production Mail revenue.
• Continued growth in Presort revenue.

Commenting on the quarter, Chairman, President and Chief Executive Officer Murray D. Martin said, “We continue to execute our strategy to be a leading provider of customer communications solutions; however, our earnings performance during the quarter did not meet our expectations. In the third quarter, our results continued to be affected by global economic weakness, especially in International Mailing and Software where public sector spending remains constrained. However, we were pleased to see gradually improving trends in North America Mailing, where equipment sales experienced a slower rate of decline and the best year-over-year comparisons in six quarters.”

Mr. Martin added, “We continue to take actions to drive sustainable long-term growth for Pitney Bowes and our shareholders and are focused on positioning Pitney Bowes to succeed in the changing market landscape. We decided to exit the International Mail Services business related to the delivery of international mail and catalogs. As we focus on the higher growth opportunities, we are growing our participation in ecommerce opportunities related to cross border parcel shipping services. One example is our collaboration with eBay to facilitate cross border ecommerce by providing technology solutions and parcel shipping services. Additionally, to address our changing business mix and current economic pressures, we are initiating actions to further streamline the business through organizational and management consolidations to further reduce our cost structure. And, we will further realign future investments in the business as we focus on higher growth opportunities.”

Third Quarter 2012 Results

Revenue in the third quarter totaled $1.2 billion, a decline of 6 percent compared to the prior year period, and reflects global economic conditions with particular impact on the International Mailing, Software and Management Services business segments. On a constant currency basis, revenue declined 5 percent and benefited from equipment sales growth in Production Mail and 3 percent growth in presort revenue.

Earnings per diluted share (EPS), as reported under Generally Accepted Accounting Principles basis (GAAP), for the quarter were $0.38, as compared with $0.85 per diluted share for the prior year. GAAP EPS for the quarter includes a charge of $0.09 per diluted share to reflect non-cash impairment charges for goodwill, intangible and long-lived assets related to the decision in October 2012 to exit the International Mail Services business. In comparison, the 2011 third quarter GAAP EPS included an $0.11 per share charge for restructuring costs and asset impairments; a $0.15 per share charge for goodwill; a $0.13 per share benefit from the sale of leveraged lease assets; and a $0.30 per share tax benefit from discontinued operations.

Adjusted EPS were $0.47, as compared with adjusted EPS of $0.69 in the same period last year. Adjusted EPS for 2012 excludes the non-cash impairment charges for goodwill, intangible and long-lived assets related to the International Mail Services business. In comparison, the 2011 third quarter adjusted EPS included a $0.05 per share benefit related to insurance reimbursements and an $0.08 per share favorable tax settlement.

Free cash flow during the quarter was $40 million and $551 million year to date. On a GAAP basis the Company generated $69 million in cash from operations for the quarter and $440 million year to date. Comparisons of cash flow this quarter versus the prior year were impacted by a large tax refund and the timing of tax payments in the third quarter of last year. Comparisons to the second quarter of this year were also impacted by the timing of tax payments, as well as the timing of working capital requirements. Year-to-date, the Company has used its cash primarily to reduce debt, pay dividends, contribute to its pension plans and make restructuring payments.