Pitney Bowes Inc.

Good morning and welcome to the Pitney Bowes second quarter 2023 earnings 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 participants on today's conference call. Mr. Mark Lautenbach, President and Chief Executive Officer. Ms. Anna Marie Chadwick, Executive Vice President and Chief Financial Officer, and Mr. Alexander Brown, Senior Manager, Investor Relations. Mr. Brown will now begin the call with a Safe Harbor overview.

Good morning. I'm Alex Brown, and thank you for joining us. Included in today's presentation are forward-looking statements about our future business and financial performance. Forward-looking statements involve risks, and uncertainties that could cause actual results to be materially different from our projections. More information about these risks and uncertainties can be found in our earnings press release, our 2022 Form 10-K Annual Report, and other reports filed with the SEC that are located on our website at www.pb.com and by clicking on Investor Relations. Please keep in mind that we do not undertake any obligation to update forward-looking statements as a result of new information or developments. Also, for non-GAAP measures that are used in the press release or discussed in our presentation materials, you can find reconciliations to the appropriate GAAP measures in the tables attached to our press release. Finally, we have provided a slide presentation and spreadsheet with historical segment information on our website. And now I'd like to turn the call over to Mark.

Thank you, Alex, and good morning, everyone. I appreciate you all joining us this morning. The second quarter played out as we expected, as trends from the first quarter largely continued. Centec and Presort grew profit for the quarter, although Centec left some transactions on the field that we were expecting. We expect those transactions to close in the third quarter. Presort had a solid quarter growing both revenue and profit for the second quarter. Both of these businesses are well positioned for the third quarter and second half. Globally Commerce continued to experience different cross currents. On the one hand, our cross-border business continued to face headwinds as two of our largest clients changed how they access our offerings. Our digital expedited business traded with the overall e-commerce market. However, the large social platform opportunity I've mentioned on previous calls began to come online. Hard to predict how this opportunity will roll out, but it could be a very interesting opportunity. Growth in our domestic parcel business, where opportunity to create value is centered, accelerated in the second quarter, and parcel growth for the quarter was right around 30%, where winning new clients and our growth is well above the market. Prices and weights are less than expected, but consistent with historical periods where retail performance is under some stress. Our network continued to perform well, and our service levels are very competitive in the market. Finally, our costs are progressing as expected and are consistent with what was expected in our long-term plan. Let me unpack the cost dynamics in this business because they provide the foundation of our confidence. Our unit cost for transportation improved 12% quarter to quarter and 26% year to year. Going forward, to achieve our long-term plan, our plan assumes postal costs trading with inflation, transportation unit costs remaining relatively flat, labor cost inflation offset by nominal productivity, and fixed cost absorption improving as volumes improve. Said another way, the plan relies on fairly standard cost improvements, resumption of market pricing, and volume growth well less than we are experiencing right now. For me, however, the big news about the quarter was how well we positioned ourselves for the second half. We got a lot of important work done. Ana will give you more details, but our restructuring program is proceeding as we expected, if not slightly ahead of schedule. Much of the cost and expense takeout is centered in GEC as we right-size that business for the reset of our cross-border business, and we fine-tune to account for better than expected performance of the network. We also completed our refinancing, which positions the balance sheet for the next several years. our bank began to buy receivables from our captive leasing company, fundamentally improving the earnings power of our bank and diversifying the bank's balance sheet. We've been working on this for a good bit, and this development improves the posture of our bank, which was already very strong. Finally, the July USPS rate case expanded work share discounts, recognizing the substantial value of the work share program to the USPS and our clients, and improving the economics of our pre-sort business going forward. So to summarize, the second quarter turned out as we expected. Lots of work came to fruition that set us up very well for the second half and going forward. With that, I'll turn over the floor to Ana to walk through the operating and financial details of the quarter.