00:00What do you see demand like in the second half of the year? Do things need to settle down before
00:04you'll get calm?
00:06Yeah. And by the way, Vani and David, thank you for having me on. I appreciate the opportunity to talk.
00:11Yeah. So just what we're seeing right now is strengthening the economy.
00:15Certainly there's the opportunity for headwinds with oil and some of the uncertainty globally.
00:20The easiest thing to talk about is just the economy right now.
00:24A little bit of context I think will help.
00:26We essentially have four businesses inside of Pitney Bowes, which gives us great visibility into the market.
00:30We have a mail meter business, which obviously is tied to Postal.
00:34We have a shipping business, which gives us insight to the shipping space, e-commerce, logistics.
00:39We also have a bank, so we have a lot of exposure to financial markets.
00:43And then finally, we have a pre-sort business, which handles a lot of mail coming out of businesses and
00:48particularly marketing mail.
00:49So it gives us a sense of the health of the consumer.
00:52And what I'd say is what we're seeing is three main things.
00:55One, the consumer is strong.
00:57Two, businesses continue to invest in the future.
01:00And then three, despite all the global uncertainty, companies are reacting quite quickly and aggressively to maintain profits and keep
01:08health on a go-forward basis.
01:10Ask about the mail and shipping side of the business.
01:12And I'm curious how much rising rates from the U.S. Postal Service affect your business generally at this moment
01:17in time, what you're seeing.
01:18Yeah, absolutely.
01:19So, you know, one thing that's very fortunate about our business is we're pretty non-cyclical.
01:24Mail, a lot of what we do isn't really tied to the economy.
01:27In terms of rising rates, we do have a bank.
01:30So one of the biggest ways, let's say, it impacts us is, you know, our cost of capital tends not
01:34to go up.
01:35We have a great deposit base of core deposits.
01:38But on the lending side, obviously, we benefit from it.
01:40So, actually, you know, rising rates can be good for us, particularly as it pertains to the bank.
01:45It won't be long before people start getting concerned once again about the sustainability of the USPS and, of course,
01:50the liquidity position.
01:51How do you think about that?
01:53I mean, it comes up regularly.
01:54Yeah, so the sustainability of the Post Office, I was in D.C. a couple weeks ago meeting with senators
01:59and congressmen.
02:00And the thing I would say, the resounding message that I heard from them is that their voters very much
02:06value the Post Office.
02:07So there's always talk about reducing mail, cutting back days of delivery, et cetera.
02:12But, you know, that's what the constituents want.
02:14I think there's a strong desire by Congress to continue to, you know, support the Post Office.
02:19So I think there's a great future for the Post Office.
02:21Give us an update on your efforts to reform and streamline this company so we got some vantage of that
02:26through this latest earnings report.
02:27But I'm curious sort of where we are in that process as you see it and what goals you have
02:31that remain to get this business in better shape.
02:33Yeah, absolutely.
02:34Thank you for the question.
02:35So, you know, we're a couple years into this transformation of the business.
02:39We've tried to be incredibly methodical as we go through this.
02:43A lot of the times as a public company, there's a lot of pressure for short-term performance.
02:47But we've been very fortunate.
02:48We have a very stable and supportive shareholder base, including myself through Hestia Capital.
02:54So we've been very diligent in fixing our business, you know, taking out unnecessary costs, streamlining processes.
03:02And we're now at a point where we're really pivoting to a focus on growth.
03:07And I think this last quarter shows some of that where a rate of decline is decelerating and our sales
03:12are picking up.
03:12So we're optimistic about the future.
03:14Kurt, can you clarify what you said about working with bankers and lawyers on a strategic review?
03:18Would you actually consider selling?
03:19Are you actively considering that?
03:21We will do whatever's best for shareholders.
03:24So some of this is tied to we have had inbound interest.
03:27It's a very interesting company.
03:30As you can imagine, there's interest from taking private.
03:33But we're going to do whatever's best for shareholders.
03:36A company in the same space?
03:37A public company?
03:40I'll leave it at we've had outreach from interested parties.
03:44But, you know, so we're evaluating, you know, is it appropriate to sell?
03:47Is it appropriate for us to expand into new areas?
03:51Should we, you know, some of the outreach has been tied to strategic partnerships.
03:54So there's a whole host of opportunities that exist for us.
03:57And we'll do whatever's in the best interest of our shareholders.
03:59We got news this week.
04:00The SEC is considering going from quarter of the reporting to biannual, twice a year reporting.
04:05You mentioned the kind of pressures that you face on a short-term basis from investors.
04:09I'm curious how you think about that.
04:11I'm not calling you to commit to anything right now.
04:13But do you see the wisdom of that move by the SEC as they kind of, as a body, think
04:16through this, how that might change the way they operate,
04:19given what you're trying to do with the company?
04:20Would that alleviate some of the short-term pressures?
04:22Well, I'll answer that in two parts.
04:24So as the CEO of a public company, it would be great to do, you know, every half as opposed
04:29to every quarter.
04:30But also I do manage a hedge fund.
04:32And as a hedge fund, you know, as an investor, I find that's incredibly important.
04:35You see both sides.
04:36Yes.
04:36And the transparency is incredibly valuable.
04:38So, you know, I certainly support continued quarterly reporting.
04:41You used to be on the GameStop board.
04:43I have to ask you what you're making.
04:45Whole GameStop situation, is it a good idea?
04:49Yeah, I, you know, GameStop was a tremendous part of my career.
04:54It was a really interesting experience.
04:56I loved everything we accomplished there.
04:59Should it buy eBay?
05:01I'll leave that to Ryan.
05:03He's a smart guy.
05:04I'm sure he'll figure it out.
05:05But, you know, since leaving the board of GameStop, I've really been focused on Pitney Bowes.
05:11So, you know, I'll leave it to him to determine what he should be doing.
05:15I'll take your overture and go back to Pitney Bowes for my last question.
05:17And that is sort of as we look at the difficulties with navigating or maintaining a supply chain, what did
05:22you learn from COVID-19, the pandemic period?
05:25And how is that applicable to what we're seeing today?
05:26We're talking about in the context of AI.
05:28But for a business like yours, what were the lessons learned from navigating the pandemic that you're applying today in
05:33this moment of uncertainty?
05:34Yeah. So as far as the logistics side, you know, COVID obviously was an incredibly unique experience from a logistics
05:41standpoint.
05:42You know, I think the biggest message wasn't so much how you run your systems.
05:46But I don't know if you recall, we had some some missteps, I'll say, prior to me joining the board
05:53in terms of how we treated our employees, how we handled, you know, the human aspect of things.
05:58And and, you know, granted, I'm an investor.
06:00But in the end of the day, businesses are built around people.
06:03And I think just, you know, the lesson I took from that is just really valuing people, making sure that
06:08you're meeting their needs and putting their interests first.
06:10So that was the biggest takeaway for me.
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