Pitney Bowes Inc 8-K, filed Aug 14, 2024
Pitney Bowes Inc (PBI)
8-K
2024-08-14
For: 2024-08-08
View Original
Added on
April 07, 2026
About this 8-K
Pitney Bowes Inc filed this 8-K on August 14, 2024, reporting on events of August 8, 2024.
Items reported
- Item 2.01: Completed an acquisition or sale of assets
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Current Report
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported)
(Exact name of registrant as specified in its charter)
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| Telephone Number: | ||||||||||||||||||||
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company☐
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act. ☐
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
On August 8, 2024, Pitney Bowes Inc. ("we" or the "Company") entered into a series of transactions designed to facilitate an orderly wind-down of a majority of the Company’s Global Ecommerce reporting segment. In connection with the wind-down, an affiliate of Hilco Commercial Industrial, LLC (“Hilco”) subscribed for 81% of the voting interests in the subsidiary, DRF Logistics, LLC owning a majority of the Global Ecommerce segment net assets and operations (DRF Logistics, LLC and its subsidiary, DRF LLC, the “Ecommerce Debtors”) for de minimis consideration (the “GEC Sale”), with a subsidiary of the Company retaining 19% of the voting interests and 100% of the economic interests. Subsequent to the GEC Sale, the Ecommerce Debtors, at the direction of their own governing bodies, filed petitions to commence Chapter 11 bankruptcy cases and conduct an orderly wind-down of the Ecommerce Debtors (the “GEC Chapter 11 Cases”). The GEC Sale, the GEC Chapter 11 Cases and any associated transactions are referred herein as the “Ecommerce Restructuring”.
The financial results of the Ecommerce Debtors, which represent a majority of the results of the Global Ecommerce segment, will no longer be included in our consolidated financial statements and will be reported as discontinued operations.
In connection with the contemplated GEC Chapter 11 Cases, we entered into a Restructuring Support Agreement (the “RSA”) with the Ecommerce Debtors. The RSA provides, among other things, an orderly wind-down of the Ecommerce Debtors, shared services between the Company and the Ecommerce Debtors for a period of time, a global settlement between the Company and the Ecommerce Debtors and a senior secured, super-priority debtor-in-possession term loan (the “DIP Facility”) in an aggregate principal amount of up to $47 million.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro forma financial information.
The Company's unaudited pro forma consolidated financial information giving effect to the Ecommerce Restructuring and sale of the fulfillment services business is attached hereto as Exhibit 99.1 and incorporated herein by reference.
(d) Exhibits
EXHIBIT INDEX
Exhibit No. Exhibit Description
104 The cover page of Pitney Bowes Inc.'s Current Report on Form 8-K, formatted in Inline XBRL (included as Exhibit 101).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Pitney Bowes Inc. | ||||||||
| By: | /s/ John A. Witek | |||||||
| Name: John A. Witek | ||||||||
| Date: August 14, 2024 | Title: Interim Chief Financial Officer (Principal Financial Officer) | |||||||
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Overview
On May 22, 2024, Pitney Bowes Inc. ("we" or the "Company") announced an initiative to expeditiously conclude a strategic review of the Global Ecommerce reporting segment. On July 24, 2024, we sold the Global Ecommerce fulfillment services business for $1 million.
Further, on August 8, 2024, we entered into a series of transactions designed to facilitate an orderly wind-down of a majority of the Company’s Global Ecommerce reporting segment. In connection with the wind-down, an affiliate of Hilco Commercial Industrial, LLC (“Hilco”) subscribed for 81% of the voting interests in the subsidiary, DRF Logistics, LLC owning a majority of the Global Ecommerce segment net assets and operations (DRF Logistics, LLC and its subsidiary, DRF LLC, the “Ecommerce Debtors”) for de minimis consideration (the “GEC Sale”), with a subsidiary of the Company retaining 19% of the voting interests and 100% of the economic interests. Subsequent to the GEC Sale, the Ecommerce Debtors, at the direction of their own governing bodies, filed petitions to commence Chapter 11 bankruptcy cases and conduct an orderly wind-down of the Ecommerce Debtors (the “GEC Chapter 11 Cases”). The GEC Sale, the GEC Chapter 11 Cases and any associated transactions as referred herein as the “Ecommerce Restructuring”.
In connection with the contemplated GEC Chapter 11 Cases, we entered into a Restructuring Support Agreement (the “RSA”) with the Ecommerce Debtors to provide for, among other things, an orderly wind-down of the Ecommerce Debtors, shared services between the Company and the Ecommerce Debtors for a period of time, a global settlement between the Company and the Ecommerce Debtors, and a senior secured, super-priority debtor-in-possession term loan (the “DIP Facility”) in an aggregate principal amount of up to $47 million.
Unaudited Pro Forma Condensed Consolidated Financial Information
The following unaudited pro forma condensed consolidated financial information ("Pro Forma Information") has been derived from the Company's historical consolidated financial statements and reflects certain assumptions and adjustments that management believes are reasonable under the circumstances and given the information available at this time. The Pro Forma Information reflects adjustments that, in the opinion of management, are necessary to present fairly the pro forma financial position as of June 30, 2024 and results of operations for the six months ended June 30, 2024 and years ended December 31, 2023, 2022 and 2021. The Pro Forma Information is provided for informational purposes only and is not intended to represent what the Company's financial position or results of operations would have been had the disposition occurred on an earlier date, nor is it indicative of its future financial position or results of operations. The unaudited pro forma condensed consolidated balance sheet gives effect to the Ecommerce Restructuring as if it occured on June 30, 2024. The unaudited pro forma consolidated statements of operations gives effect to the Ecommerce Restructuring as if it had occured on January 1, 2023 and reflect the reclassification of the Ecommerce Restructuring and sale of the fulfillment services business as discontinued operations for all periods presented. The Pro Forma Information should be read in conjunction with the Company's historical consolidated financial statements and accompanying notes. Additional information about the pro forma adjustments can be found in the Notes to Unaudited Pro Forma Consolidated Financial Information.
Pitney Bowes Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2024
(in thousands, except per share amount)
| Historical | Disposal Group | Continuing Operations | Pro Forma Adjustments | Pro Forma | |||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Current assets: | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 590,147 | $ | 9,357 | $ | 580,790 | $ | (47,000) | (a) | $ | 533,790 | ||||||||||||||||||
| Short-term investments (includes $1,752 reported at fair value) | 21,852 | — | 21,852 | — | 21,852 | ||||||||||||||||||||||||
| Accounts and other receivables (net of allowance of $10,079) | 266,172 | 98,446 | 167,726 | — | 167,726 | ||||||||||||||||||||||||
| Short-term finance receivables (net of allowance of $14,418) | 541,957 | — | 541,957 | — | 541,957 | ||||||||||||||||||||||||
| DIP Facility | — | — | — | 47,000 | (a) | 47,000 | |||||||||||||||||||||||
| Inventories | 76,500 | 8,397 | 68,103 | — | 68,103 | ||||||||||||||||||||||||
| Current income taxes | 7,850 | — | 7,850 | — | 7,850 | ||||||||||||||||||||||||
| Other current assets and prepayments | 101,263 | 14,241 | 87,022 | — | 87,022 | ||||||||||||||||||||||||
| Total current assets | 1,605,741 | 130,441 | 1,475,300 | — | 1,475,300 | ||||||||||||||||||||||||
| Property, plant and equipment, net | 359,452 | 130,391 | 229,061 | — | 229,061 | ||||||||||||||||||||||||
| Rental property and equipment, net | 22,334 | — | 22,334 | — | 22,334 | ||||||||||||||||||||||||
| Long-term finance receivables (net of allowance of $8,341) | 625,734 | — | 625,734 | — | 625,734 | ||||||||||||||||||||||||
| Goodwill | 727,613 | — | 727,613 | — | 727,613 | ||||||||||||||||||||||||
| Intangible assets, net | 54,339 | 36,270 | 18,069 | — | 18,069 | ||||||||||||||||||||||||
| Operating lease assets | 297,638 | 169,807 | 127,831 | — | 127,831 | ||||||||||||||||||||||||
| Noncurrent income taxes | 58,063 | — | 58,063 | — | 58,063 | ||||||||||||||||||||||||
| Other assets (includes $209,711 reported at fair value) | 327,488 | 7,996 | 319,492 | — | 319,492 | ||||||||||||||||||||||||
| Total assets | $ | 4,078,402 | $ | 474,905 | $ | 3,603,497 | $ | — | $ | 3,603,497 | |||||||||||||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||||||||||||||||||||||||
| Current liabilities: | |||||||||||||||||||||||||||||
| Accounts payable and accrued liabilities | $ | 843,148 | $ | 71,817 | $ | 771,331 | $ | 3,987 | (b) | $ | 775,318 | ||||||||||||||||||
| Customer deposits at Pitney Bowes Bank | 628,711 | — | 628,711 | — | 628,711 | ||||||||||||||||||||||||
| Current operating lease liabilities | 61,143 | 34,144 | 26,999 | — | 26,999 | ||||||||||||||||||||||||
| Current portion of long-term debt | 57,290 | — | 57,290 | — | 57,290 | ||||||||||||||||||||||||
| Advance billings | 86,339 | 10,006 | 76,333 | — | 76,333 | ||||||||||||||||||||||||
| Current income taxes | 1,556 | — | 1,556 | — | 1,556 | ||||||||||||||||||||||||
| Total current liabilities | 1,678,187 | 115,967 | 1,562,220 | 3,987 | 1,566,207 | ||||||||||||||||||||||||
| Long-term debt | 2,065,034 | — | 2,065,034 | — | 2,065,034 | ||||||||||||||||||||||||
| Deferred taxes on income | 193,835 | 8,959 | 184,876 | — | 184,876 | ||||||||||||||||||||||||
| Tax uncertainties and other income tax liabilities | 14,538 | — | 14,538 | — | 14,538 | ||||||||||||||||||||||||
| Noncurrent operating lease liabilities | 263,758 | 143,754 | 120,004 | — | 120,004 | ||||||||||||||||||||||||
| Other noncurrent liabilities | 290,939 | 22,168 | 268,771 | — | 268,771 | ||||||||||||||||||||||||
| Total liabilities | 4,506,291 | 290,848 | 4,215,443 | 3,987 | 4,219,430 | ||||||||||||||||||||||||
Stockholders' deficit: | |||||||||||||||||||||||||||||
| Common stock, $1 par value (480,000 shares authorized; 270,338 shares issued) | 270,338 | — | 270,338 | — | 270,338 | ||||||||||||||||||||||||
| Retained earnings | 2,948,959 | 184,057 | 2,764,902 | (3,987) | (b) | 2,760,915 | |||||||||||||||||||||||
| Accumulated other comprehensive loss | (865,523) | — | (865,523) | — | (865,523) | ||||||||||||||||||||||||
| Treasury stock, at cost (91,217 shares) | (2,781,663) | — | (2,781,663) | — | (2,781,663) | ||||||||||||||||||||||||
| Total stockholders’ deficit | (427,889) | 184,057 | (611,946) | (3,987) | (615,933) | ||||||||||||||||||||||||
| Total liabilities and stockholders’ deficit | $ | 4,078,402 | $ | 474,905 | $ | 3,603,497 | $ | — | $ | 3,603,497 | |||||||||||||||||||
Pitney Bowes Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Six Months Ended June 30, 2024
(in thousands, except per share amounts)
| Historical | Disposal Group | Continuing Operations | |||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||
| Business services | $ | 1,042,263 | $ | 598,502 | $ | 443,761 | |||||||||||||||||||||||
| Support services | 190,345 | — | 190,345 | ||||||||||||||||||||||||||
| Financing | 135,202 | — | 135,202 | ||||||||||||||||||||||||||
| Equipment sales | 150,156 | — | 150,156 | ||||||||||||||||||||||||||
| Supplies | 72,230 | — | 72,230 | ||||||||||||||||||||||||||
| Rentals | 33,483 | — | 33,483 | ||||||||||||||||||||||||||
| Total revenue | 1,623,679 | 598,502 | 1,025,177 | ||||||||||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||||||||
| Cost of business services | 876,123 | 600,612 | 275,511 | ||||||||||||||||||||||||||
| Cost of support services | 64,719 | — | 64,719 | ||||||||||||||||||||||||||
| Financing interest expense | 32,568 | — | 32,568 | ||||||||||||||||||||||||||
| Cost of equipment sales | 102,873 | — | 102,873 | ||||||||||||||||||||||||||
| Cost of supplies | 20,553 | — | 20,553 | ||||||||||||||||||||||||||
| Cost of rentals | 9,117 | — | 9,117 | ||||||||||||||||||||||||||
| Selling, general and administrative | 436,205 | 59,256 | 376,949 | ||||||||||||||||||||||||||
| Research and development | 18,589 | 3,705 | 14,884 | ||||||||||||||||||||||||||
| Restructuring charges | 36,158 | 1,994 | 34,164 | ||||||||||||||||||||||||||
| Interest expense, net | 56,533 | 974 | 55,559 | ||||||||||||||||||||||||||
| Other components of net pension and post retirement income | (769) | — | (769) | ||||||||||||||||||||||||||
| Total costs and expenses | 1,652,669 | 666,541 | 986,128 | ||||||||||||||||||||||||||
(Loss) income from continuing operations before income taxes | (28,990) | (68,039) | 39,049 | ||||||||||||||||||||||||||
(Benefit) provision for income taxes from continuing operations | (1,238) | (19,975) | 18,737 | ||||||||||||||||||||||||||
Net (loss) income from continuing operations | $ | (27,752) | $ | (48,064) | $ | 20,312 | |||||||||||||||||||||||
Basic net (loss) earnings per share - Continuing operations | $ | (0.16) | $ | 0.11 | |||||||||||||||||||||||||
Diluted net (loss) earnings per share - Continuing operations | $ | (0.16) | $ | 0.11 | |||||||||||||||||||||||||
Weighted average number of shares outstanding: | |||||||||||||||||||||||||||||
| Basic | 177,872 | 177,872 | |||||||||||||||||||||||||||
| Diluted | 177,872 | 181,342 | |||||||||||||||||||||||||||
Pitney Bowes Inc.
Consolidated Statement of Operations
For the Year Ended December 31, 2023
(In thousands, except per share amounts)
| Historical | Disposal Group | Continuing Operations | |||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||
| Business services | $ | 2,045,069 | $ | 1,158,372 | $ | 886,697 | |||||||||||||||||||||||
| Support services | 410,734 | — | 410,734 | ||||||||||||||||||||||||||
| Financing | 271,197 | — | 271,197 | ||||||||||||||||||||||||||
| Equipment sales | 323,739 | — | 323,739 | ||||||||||||||||||||||||||
| Supplies | 147,709 | — | 147,709 | ||||||||||||||||||||||||||
| Rentals | 67,900 | — | 67,900 | ||||||||||||||||||||||||||
| Total revenue | 3,266,348 | 1,158,372 | 2,107,976 | ||||||||||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||||||||
| Cost of business services | 1,756,616 | 1,146,668 | 609,948 | ||||||||||||||||||||||||||
| Cost of support services | 137,676 | — | 137,676 | ||||||||||||||||||||||||||
| Financing interest expense | 63,281 | — | 63,281 | ||||||||||||||||||||||||||
| Cost of equipment sales | 223,757 | — | 223,757 | ||||||||||||||||||||||||||
| Cost of supplies | 43,347 | — | 43,347 | ||||||||||||||||||||||||||
| Cost of rentals | 19,614 | — | 19,614 | ||||||||||||||||||||||||||
| Selling, general and administrative | 897,260 | 118,273 | 778,987 | ||||||||||||||||||||||||||
| Research and development | 41,405 | 11,919 | 29,486 | ||||||||||||||||||||||||||
| Restructuring charges | 61,585 | 9,173 | 52,412 | ||||||||||||||||||||||||||
| Goodwill impairment | 339,184 | 339,184 | — | ||||||||||||||||||||||||||
| Interest expense, net | 100,445 | 1,677 | 98,768 | ||||||||||||||||||||||||||
| Other components of net pension and postretirement cost | (8,256) | — | (8,256) | ||||||||||||||||||||||||||
| Other income | (3,064) | — | (3,064) | ||||||||||||||||||||||||||
| Total costs and expenses | 3,672,850 | 1,626,894 | 2,045,956 | ||||||||||||||||||||||||||
(Loss) income from continuing operations before income taxes | (406,502) | (468,522) | 62,020 | ||||||||||||||||||||||||||
(Benefit) provision for income taxes from continuing operations | (20,875) | (32,863) | 11,988 | ||||||||||||||||||||||||||
Net (loss) income from continuing operations | $ | (385,627) | $ | (435,659) | $ | 50,032 | |||||||||||||||||||||||
Basic net (loss) earnings per share - Continuing operations | $ | (2.20) | $ | 0.28 | |||||||||||||||||||||||||
Diluted net (loss) earnings per share - Continuing operations | $ | (2.20) | $ | 0.28 | |||||||||||||||||||||||||
Weighted average number of shares outstanding: | |||||||||||||||||||||||||||||
Basic | 175,640 | 175,640 | |||||||||||||||||||||||||||
Diluted | 175,640 | 179,685 | |||||||||||||||||||||||||||
Pitney Bowes Inc.
Consolidated Statement of Operations
For the Year Ended December 31, 2022
(In thousands, except per share amounts)
| Historical | Disposal Group | Continuing Operations | |||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||
| Business services | $ | 2,249,941 | $ | 1,041,013 | $ | 1,208,928 | |||||||||||||||||||||||
| Support services | 438,191 | — | 438,191 | ||||||||||||||||||||||||||
| Financing | 274,508 | — | 274,508 | ||||||||||||||||||||||||||
| Equipment sales | 354,960 | — | 354,960 | ||||||||||||||||||||||||||
| Supplies | 154,186 | — | 154,186 | ||||||||||||||||||||||||||
| Rentals | 66,256 | — | 66,256 | ||||||||||||||||||||||||||
| Total revenue | 3,538,042 | 1,041,013 | 2,497,029 | ||||||||||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||||||||
| Cost of business services | 1,934,206 | 1,028,333 | 905,873 | ||||||||||||||||||||||||||
| Cost of support services | 148,829 | — | 148,829 | ||||||||||||||||||||||||||
| Financing interest expense | 51,789 | — | 51,789 | ||||||||||||||||||||||||||
| Cost of equipment sales | 253,843 | — | 253,843 | ||||||||||||||||||||||||||
| Cost of supplies | 43,778 | — | 43,778 | ||||||||||||||||||||||||||
| Cost of rentals | 25,105 | — | 25,105 | ||||||||||||||||||||||||||
| Selling, general and administrative | 905,570 | 118,374 | 787,196 | ||||||||||||||||||||||||||
| Research and development | 43,657 | 8,193 | 35,464 | ||||||||||||||||||||||||||
| Restructuring charges | 18,715 | 1,507 | 17,208 | ||||||||||||||||||||||||||
| Interest expense, net | 89,980 | 2,674 | 87,306 | ||||||||||||||||||||||||||
Other components of net pension and post retirement cost | 4,308 | — | 4,308 | ||||||||||||||||||||||||||
| Other income | (21,618) | (4,546) | (17,072) | ||||||||||||||||||||||||||
| Total costs and expenses | 3,498,162 | 1,154,535 | 2,343,627 | ||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 39,880 | (113,522) | 153,402 | ||||||||||||||||||||||||||
Provision (benefit) for income taxes from continuing operations | 2,940 | (22,663) | 25,603 | ||||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | 36,940 | $ | (90,859) | $ | 127,799 | |||||||||||||||||||||||
Basic earnings per share - Continuing operations | $ | 0.21 | $ | 0.73 | |||||||||||||||||||||||||
Diluted earnings per share - Continuing operations | $ | 0.21 | $ | 0.72 | |||||||||||||||||||||||||
| Weighted average number of shares outstanding: | |||||||||||||||||||||||||||||
| Basic | 173,912 | 173,912 | |||||||||||||||||||||||||||
| Diluted | 177,252 | 177,252 | |||||||||||||||||||||||||||
Pitney Bowes Inc.
Consolidated Statement of Operations
For the Year Ended December 31, 2021
(In thousands, except per share amounts)
| Historical | Disposal Group | Continuing Operations | |||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||
| Business services | $ | 2,334,674 | $ | 975,644 | $ | 1,359,030 | |||||||||||||||||||||||
| Support services | 460,888 | — | 460,888 | ||||||||||||||||||||||||||
| Financing | 294,418 | — | 294,418 | ||||||||||||||||||||||||||
| Equipment sales | 350,138 | — | 350,138 | ||||||||||||||||||||||||||
| Supplies | 159,438 | — | 159,438 | ||||||||||||||||||||||||||
| Rentals | 74,005 | — | 74,005 | ||||||||||||||||||||||||||
| Total revenue | 3,673,561 | 975,644 | 2,697,917 | ||||||||||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||||||||
| Cost of business services | 2,034,477 | 1,020,308 | 1,014,169 | ||||||||||||||||||||||||||
| Cost of support services | 149,706 | — | 149,706 | ||||||||||||||||||||||||||
| Financing interest expense | 47,059 | — | 47,059 | ||||||||||||||||||||||||||
| Cost of equipment sales | 251,914 | — | 251,914 | ||||||||||||||||||||||||||
| Cost of supplies | 43,980 | — | 43,980 | ||||||||||||||||||||||||||
| Cost of rentals | 24,427 | — | 24,427 | ||||||||||||||||||||||||||
| Selling, general and administrative | 924,163 | 22,156 | 902,007 | ||||||||||||||||||||||||||
| Research and development | 46,777 | 65 | 46,712 | ||||||||||||||||||||||||||
| Restructuring charges | 19,003 | 1,041 | 17,962 | ||||||||||||||||||||||||||
| Interest expense, net | 96,886 | 2,579 | 94,307 | ||||||||||||||||||||||||||
| Other components of net pension and post retirement cost | 1,010 | — | 1,010 | ||||||||||||||||||||||||||
| Other expense (income) | 41,574 | (10,564) | 52,138 | ||||||||||||||||||||||||||
| Total costs and expenses | 3,680,976 | 1,035,585 | 2,645,391 | ||||||||||||||||||||||||||
| (Loss) income from continuing operations before income taxes | (7,415) | (59,941) | 52,526 | ||||||||||||||||||||||||||
(Benefit) provision for income taxes from continuing operations | (10,922) | (14,712) | 3,790 | ||||||||||||||||||||||||||
| Net income (loss) from continuing operations | $ | 3,507 | $ | (45,229) | $ | 48,736 | |||||||||||||||||||||||
| Basic earnings (loss) per share - Continuing operations | $ | 0.02 | $ | 0.28 | |||||||||||||||||||||||||
| Diluted earnings (loss) per share - Continuing operations | $ | 0.02 | $ | 0.27 | |||||||||||||||||||||||||
| Weighted average number of shares outstanding: | |||||||||||||||||||||||||||||
| Basic | 173,914 | 173,914 | |||||||||||||||||||||||||||
| Diluted | 179,105 | 179,105 | |||||||||||||||||||||||||||
Notes to Unaudited Pro Forma Condensed Consolidated Financial Information
Note 1: Basis of Presentation
The unaudited pro forma condensed consolidated financial information has been prepared from the Company's historical accounting records and in accordance with Article 11 of SEC Regulation S-X Pro Forma Financial Information, as amended. The unaudited pro forma condensed consolidated balance sheet gives effect to the Ecommerce Restructuring as if it occured on June 30, 2024. The unaudited pro forma consolidated statements of operations gives effect to the Ecommerce Restructuring as if it had occured on January 1, 2023.
Discontinued operations reflect associated assets, liabilities, and stockholders' equity and results of operations attributable to the Ecommerce Debtors and fulfillment services business, which were included in the Company's historical consolidated financial statements in accordance with ASC 205-20. The amounts exclude:
•General corporate overhead costs historically allocated to the Global Ecommerce segment that do not meet the requirements to be presented in discontinued operations.
•The impact of intercompany activity that was eliminated in consolidation.
The Historical column represents the historical consolidated balance sheet as of June 30, 2024 and the consolidated statement of operations for the six months ended June 30, 2024 were derived from the Company's unaudited condensed consolidated financial statements included in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024. The historical consolidated statements of operations for each of the years ended December 31, 2023, 2022 and 2021 were derived from the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2023.
The Disposal Group column represents the elimination of historical assets and liabilities of the Ecommerce Debtors and the fulfillment services business from the Company’s Condensed Consolidated Balance Sheet at June 30, 2024 and the reclassification of their results of operations from continuing operations to discontinued operations (not presented herein) with the Company's Consolidated Statements of Operations for the six months ended June 30, 2024 and years ended December 31, 2023, 2022, and 2021.
Note 2: Pro Forma Adjustments
The Pro Forma Financial Information has been prepared in accordance with Regulation S-X Article 11 and reflect preliminary estimates of the accounting adjustments to the transactions referred to above. The pro forma adjustments do not reflect future events that may occur after the Ecommerce Restructuring, including the realization of any cost savings or potential one-time costs that could be incurred associated with the transaction. Pro forma adjustments include:
a.Represents the aggregate funding by the Company under the DIP Facility to the Ecommerce Debtors and related DIP Facility receivable. The DIP Facility bears interest at an annual rate of 10%. Due to the uncertainty of timing and amounts of funding under the DIP Facility, we have not included a pro forma adjustment for interest income. The DIP Facility matures in November 2024.
b.Represents the accrual of $4 million of transaction costs incurred through the closing date of the Ecommerce Restructuring not included in the historical amounts as of June 30, 2024. These costs would be reflected as discontinued operations and as such, have not been reflected in the proforma statement of operations.
Note 3: Earnings Per Share
Basic earnings per share is computed based on the weighted-average number of shares outstanding during the year. Diluted earnings per share is computed based on the weighted-average number of shares outstanding during the year plus the weighted-average dilutive effect of common stock equivalents.
Due to the net loss reported for the period, historical diluted earnings per share for the six months ended June 30, 2024 and year ended December 31, 2023 was calculated using weighted-average basic shares outstanding.
Note 4: Other
The Company and the Ecommerce Debtors entered into the RSA whereby the Company will perform certain support functions for a period of time. Income and expenses related to the RSA have not been included as a pro forma adjustment as the RSA and any potential amounts to be received thereunder, are subject to approval by the bankruptcy court.