Bradley L. Radoff Issues Letter to Recently-Appointed Directors Steven Brill and Darrell Thomas Regarding the Need for Urgent Action at Pitney Bowes
Bradley L. Radoff today released the below letter to two members of the Pitney Bowes, Inc. (NYSE: PBI) Board of Directors.
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Pitney Bowes, Inc.
3001 Summer Street
Stamford, CT 06926
Attention: Independent Directors Steven Brill and Darrell Thomas
August 21, 2023
Dear Messrs. Brill and Thomas,
I own a meaningful equity stake in Pitney Bowes, Inc. ("Pitney Bowes" or the "Company"), making me one of the Company's largest individual shareholders. I hoped that you two, despite being appointed as part of the Board's defensive refresh this past spring, would not perpetuate the value-destructive status quo championed by Chief Executive Officer Marc Lautenbach and Chair Mary J. Guilfoile. Unfortunately, the reconstituted Board's failure to make any significant change leads me to question whether you have the will to oppose the entrenched incumbents. It seems clear that Mr. Lautenbach is an impediment to addressing issues with Global Ecommerce ("GEC") and the bloated overhead ? both of which are a result of his empire building enabled by an entrenched Board. Shareholders simply want to see a strongly profitable company driven by Presort and SendTech. The following is a quick summary of the situation you face:
- Over the past five years, the Company's share price is down roughly 60% and the GEC segment ? which is valuable in the right hands ? has driven hundreds of millions of capital investment and losses.
- As shareholders have seen their value destroyed, Mr. Lautenbach has repeatedly said GEC is on the verge of being profitable.
- On January 28, when the Company's full-year results revealed negative EBIT of approximately $100 million for GEC, Mr. Lautenbach once again indicated that profitability was right around the corner for the segment.
- On May 1, you two said in a public letter that "GEC today is well positioned to take advantage of growing e-commerce trends and is on the path to long-term profitability." Shareholders now know "long-term profitability" was really a euphemism for massive short-term losses and who really knows when profitable.
- On May 4, the Company's Q1 2023 financial results showed negative EBIT of approximately $34 million for GEC.
- On August 3, the Company's Q2 2023 financial results showed negative EBIT of approximately $38 million for GEC.
I fear you may have been misled about the state of GEC when you joined. Regardless, you now bear responsibility for the actions of Mr. Lautenbach and the losses posted by GEC. The clock is ticking.
You need to understand that shareholders ? the true owners of Pitney Bowes ? expected immediate action after the Board forced an absurdly expensive and wasteful proxy contest that resulted in four legacy directors being voted out. Rather than be a logjam, please differentiate yourself from the failed legacy directors by supporting the following:
- An orderly departure for Mr. Lautenbach, who has spent more than 10 years being rewarded for failure and value destruction.
- A public commitment to divest GEC, which is far more valuable to a strategic acquirer.
- A public commitment to cost containment initiatives that would promptly reduce Pitney Bowes' bloated corporate overhead. I would expect a minimum $50 million reduction from the unallocated overhead.
Thank you for your consideration. You have a tremendous opportunity to turn around Pitney Bowes for the benefit of long-suffering shareholders and stakeholders. If you begin putting yourselves in the position of the owners of the business, I am confident you will see urgent action is required.
Sincerely,
Bradley L. Radoff
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