Good morning. Welcome to the Pitney Bowes First 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. Marc Lautenbach, President and Chief Executive Officer, Ms. Ana Maria Chadwick, Executive Vice President and Chief Financial Officer, and Mr. Ned Zacker, Vice President, Investor Relations. Mr. Zacker will now begin the call with the safe harbor overview. Good morning, everybody. This is Ned Zacker, and I manage the Investor Relations program for Pitney Bowes. I'd like to welcome everyone to the call this morning. We very much appreciate your interest and participation. Part of my duties includes covering the safe harbor information for these calls, so please bear with me for just a few minutes. 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. For more information about these risks and uncertainties, please see 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. 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 and also on our website. Additionally, we have provided a slide presentation and a spreadsheet with historical segment information on our IR website that summarizes many of the points we will discuss during today's call. You are likely aware that Hestia Capital has nominated several director candidates in advance of our upcoming annual meeting. Please note that today's call is about our first quarter earnings, and we will not be answering questions related to those nominations on this call. Our format today is as follows: Marc Lautenbach, our President and Chief Executive Officer, will begin with opening remarks, which will be followed by Ana Chadwick, our Chief Financial Officer, who will provide an in-depth discussion of our financial results. I'd now like to turn the presentation over to Marc. Marc, the floor is yours. Thanks, Ned. Good morning, everyone. I appreciate everyone joining our call this morning. Trends from the fourth quarter continued into the new year. Specifically, domestic parcel continued to grow, significantly outpacing a soft market, while cross-border continued to face meaningful headwinds. Our Presort and SendTech segments provided overall ballast to the enterprise with steady profits on a year-over-year basis. Let me unpack each of these dynamics. Our Presort segment performed well in a fairly difficult market. While first-class mail and marketing mail volumes declined in the market, Presort drove solid productivity. The net, revenue that was down slightly and profit that was up significantly. SendTech performed consistent with our expectations and delivered strong margins and Adjusted Segment EBIT performance. Our shipping offerings in SendTech continued to be very well accepted in the market, and you can see on the horizon the absolute gains in shipping revenue outpacing the declines in mailing revenues driven by secular trends. Both Presort and SendTech are well positioned for the year, and in aggregate, we expect these businesses to grow Adjusted Segment EBIT for the calendar year. In Global Ecommerce, where we provide three distinct services, including domestic parcels, cross-border, and digital, there were three very different dynamics in each business. In domestic parcel, where opportunity to create long-term value is centered, we made good progress. Our domestic parcel volume grew 22% in a market which was flat and is well ahead of other industry players who are seeing softness. This increase was enabled by substantive year-to-year progress on our client service levels, which are now hovering around industry best in class. The profile of the volume in our domestic network continues to be lighter weight standard delivery. We are seeing softer return volumes as retailers reduce incentives that drive returns which carry higher revenue per parcel. We are seeing substantial unit cost improvements as our volume builds, which helped our domestic parcel gross margin performance. I should also point out that 80% of the current pipeline across GEC is comprised of higher margin services, including cross-border delivery, returns, digital, and attractive standard delivery parcels. In digital, we essentially traded with the market, but have some substantive potential opportunities which we're excited about. For GEC, cross-border continued to be under pressure as we battled macroeconomic headwinds and the change in two client relationships, with one choosing to insource much of that business and the other changing how it manages it, which is resulting in lower volumes. Ana will further unpack and isolate these very different dynamics. While the net of these items was disappointing, we believe the improvement in domestic parcel bodes well for the realization of our long-term aspirations. The preponderance of our value creation opportunity resides in domestic parcel, which has a large addressable market with what we believe to be very good growth opportunities. As we've said in the past, we continue to be open to different alternatives as we go forward with GEC, and we are continually evaluating different paths to unlock value. We are augmenting our cost reduction efforts, which we originally announced in late 2022 to take out spend. There are three very different motivations behind these actions. The first is our ongoing efforts to become more efficient. As I've said before, the work of becoming more efficient is never done. Next, we are resetting our cost structure in Global Ecommerce to reflect the realities of the cross-border market, where the headwinds are not likely to come anytime soon. In addition, the overall performance of our domestic parcel network has revealed the opportunity to do more with less. Said another way, we believe the network we have built can deliver the volumes contemplated in our long-term strategic plan with fewer sites and at reduced operating expense levels. This is due to the terrific work the team has done designing and running the domestic parcel network. To be very clear, we do not anticipate that our domestic network will require meaningful incremental investment, and none of these adjustments affect our ability to achieve our long-term aspirations. I'll now turn the floor over to Ana to walk through the operating and financial details of the quarter. Thank you, Marc, and good morning, everyone. Before I begin my financial review, I'll note that the year-over-year revenue information will be discussed on a comparable basis, which adjusts for the impact of currency, the disposition of Borderfree, and a revenue presentation change for our digital services, which we discussed in detail last quarter. This revenue presentation change primarily affects Global Ecommerce revenues and to a lesser extent, SendTech. The change does not affect the dollar profitability of our activities. Please note that we are updating the name of our segment profit measure to Adjusted Segment EBIT. There is no change in how we have historically calculated these figures. Unless otherwise noted, I will speak to other items such as EBIT, EBITDA, and EPS on an adjusted basis. The following is a high-level review of our year-over-year comparison for our first quarter results. Total revenue for the quarter was $835 million, which is a decrease of 4% compared to the prior year first quarter. Gross profit for the company was $278 million, compared to $306 million for the same period last year, a 9% decrease. In percentage term, gross margin was stable at 33% compared to last year. EBITDA was $73 million, compared to $95 million a year ago. EBIT was $33 million, compared to $53 million in prior year. Interest expense was $37 million, up from last year's $34 million level. Corporate expenses for the quarter were $56 million, down $1 million from a year ago. Adjusted earnings per share was a $0.01 loss, compared to $0.08 in the prior year. Turning to cash flow. GAAP cash from operating activities was a use of $40 million in the quarter, compared to a source of $11 million in 2021. Working capital timing differences, which we expect to normalize during the balance of 2023, was the primary reason for the variance versus last year. Free cash flow was negative $61 million, compared to negative $17 million last year. Beginning with this quarter, we have updated our free cash flow definition to exclude changes in deposits at The Pitney Bowes Bank. Many of our clients regularly deposit money at the bank, which is a convenient payment mechanism for ongoing postage spend. Fluctuations in these deposits are based on the cash needs of our clients and not within our control, which is why we're removing it from how we define free cash flow. Our new definition, GAAP cash from operations, less CapEx, less restructuring, and one-time items, is in line with many of our industry peers. CapEx for the quarter was $29 million, down from $33 million in prior year. During the quarter, we paid $9 million in dividends and made $5 million in restructuring payments. Let's turn to a discussion of our three business segments. Segment information is summarized in our press release, slide presentation, and quarterly spreadsheet, all of which were posted on our Investor Relations website. I'll start with SendTech. SendTech reported revenues of $327 million in the quarter, which was down 4% compared to prior year. Financing, equipment, rentals, and supplies revenues declined low to mid-single digit, which were partially offset by continued growth in our shipping-related revenues. SendTech's Adjusted Segment EBIT was $97 million, compared to $105 million in the prior year. Margin for the quarter was stable at 30%. We are optimistic on the top and bottom-line progress for SendTech for several reasons. Shipping-related revenue grew 8% versus prior year and now comprises 11% of segment revenues. Recurring SaaS subscription revenues were 24% higher. We refreshed our top-of-the-line mailing product, SendPro MailCenter, which is getting a terrific reception from our clients. Our mid-range SendPro C Series has seen the highest demand in over two years. Our innovation efforts in SendTech remain robust. We recently launched PitneyShip Cube and continue to add more features to our Shipping 360 platform. Specifically, we added more data importing and analytic capabilities, more international origin shipping, and more multi-factor authentication. I'll spend a moment on the performance of our financial services inside of SendTech. Like last quarter, finance receivables were up 3% versus prior year. We continue to see healthy payment trends across our financing portfolio. 30-day delinquencies were 1.5%, down 30 basis points year-over-year. As of the end of the quarter, the finance portfolio totaled $1.2 billion. In summary, SendTech continued its solid performance and made strides in shipping, new products, and financial services, which are positive indicators for the overall health of the business. Let's turn to Presort, which had a very solid quarter. Presort revenues were $159 million in the quarter, which is a 1% decline from last year. Lower volumes from existing customers were essentially offset by better revenue per piece and new customer additions. Total sortation volume of 4 billion was down 9% compared to prior year. Adjusted Segment EBIT for the quarter was $27 million, up 37% versus last year. Adjusted Segment EBIT margin was 17%, which is nearly 500 basis points better than prior year. Margin improvement was driven by three factors. First, better revenue per piece. Second, investments in new sorters, which is creating substantial improvements in labor productivity. Third, lower unit transportation costs. Let's shift to Global Ecommerce, where considerable headwinds continue to affect our financial performance. Global Ecommerce revenue in the quarter was $348 million, which is a 5% decline versus prior year. Adjusted Segment EBIT was negative $34 million compared to negative $14 million last year. The primary driver for the decline in Global Ecommerce revenues and profitability were headwinds in our cross-border services. Cross-border revenue, which represented 17% of segment revenues in the quarter, were down 35% versus prior year, while gross margin dollars were down 67%. In addition to macroeconomic headwinds, two key client relationships are changing, resulting in lower volumes into the cross-border network. These changes have largely been incorporated into our guidance, and so have key actions we are taking to diversify and expand our cross-border offering, including the expansion of the Canada to US and intra-Canada lanes. Although cross-border performance continues to be challenging, we are encouraged by the ongoing progress in domestic parcels. Network optimization moves, which took place over a year ago, have resulted in consistently stronger service levels with on-time delivery now in the mid-90s. Our much-improved service levels and client satisfaction have been key factors in increased volumes and revenues. Domestic parcel volumes were 50 million in the first quarter compared to 41 million a year ago, a 22% increase, while domestic parcel revenues increased 16%. On a per parcel basis, gross margin was flat versus first quarter 2022, and nearly $0.10 higher versus full year 2022. We are encouraged by the team's ability to drive productivity gains as we scale volumes. In the quarter, per parcel transportation and labor costs improved 12% compared to first quarter 2022. Unit fixed costs were flat as a result of investments in the second half of 2022. The improvements in transportation and labor unit costs were absorbed by lower revenue per piece. Specifically, more of our volume is less than one pound, and coming out of peak, we saw softness in returns as retailers reduced incentives in order to cut costs. The net was less attractive parcel mix in a more competitive pricing environment, which resulted in lower revenue per parcel. The path to profitability is largely driven by scaling the terrific network we have built. We are responding to current macro and industry conditions by focusing on the following four priorities. First, regarding clients. Our go-to-market team continues to succeed in spite of the softer logistics market trends. In the first quarter 2023, we signed 82 new contracts and completed 57 service launches compared to 45 and 44 respectively in the prior year. Anticipated revenue from the new arrangements is approximately 50% higher than prior year, and late stage sales pipeline includes a more favorable mix of higher weight and margin prospects. Second, we expect our continued growth, combined with our investments in automation, to drive approximately 15% in per parcel transportation and labor productivity throughout 2023. Third, on the cost side, we have identified several older manual facilities where we see consolidation opportunities. As part of a company-wide restructuring program, which I'll address in more detail shortly, Global Ecommerce will be consolidating some smaller facilities and shifting those clients' volumes to neighboring, more automated sites. In addition, Global Ecommerce will be rightsizing the management oversight required for the new footprint. We anticipate these actions, combined with productivity improvements, to deliver annualized savings of over $40 million. Fourth, in terms of Global Ecommerce CapEx, we anticipate spending approximately $20 million less compared to the $51 million level we spent in 2022. The network build is nearly complete and operating efficiently. We expect to process the volumes contemplated in our long-term plan with fewer sites. To conclude, cross-border weighed heavily on Global Ecommerce first quarter results. While domestic parcel continued to stride towards sustainable, profitable growth, the combination of higher volumes, better mix, more transportation efficiency, and cost reductions are key to reaching profitability. Let me shift gears and discuss our overall company cost actions in more detail. On the third quarter 2022 earnings call, I discussed expected cost savings. Given the continued macro uncertainties, we are announcing a restructuring program to further improve profit and cash flow. We expect this program, combined with other productivity actions, to yield annual gross savings of approximately $75 million, $25 million higher than previously communicated. For this new program, we expect restructuring charges of $40 million-$50 million, with the majority of these to be recognized in 2023. This program, combined with the actions taken in the first quarter of 2023, will result in workforce reductions and facility rationalization. We expect to achieve roughly 2/3 of the total gross annualized savings, or approximately $50 million, by the end of 2024. We expect capital expenditures for the company to be closer to $100 million, which is roughly $25 million lower than 2022. During the quarter, we bought $26 million of bonds in the open market, and the 2024 maturity has been reduced to $227 million. We are actively exploring options to refinance our 2024 debt maturity. To be clear, the combination of cash and revolver capacity are sufficient to handle the maturity if needed. For full year 2023, we continue to expect flat to mid-single digit% revenue growth on a comparable basis. We also continue to expect Adjusted EBIT performance to outpace the% change in revenue. In addition, we anticipate current business trends to continue into the second quarter. We expect improving results in the second half of the year, driven by incremental domestic parcel volumes and the previously discussed cost actions. In closing, SendTech and Presort continue to deliver solid and predictable performance. In Global Ecommerce, we made progress in domestic parcel and look forward to continuing this momentum as we move through 2023. Operator, please open the call to questions. Thank you. Ladies and gentlemen, if you'd like to ask a question, please press one then zero on your telephone keypad. You may withdraw your question at any time by repeating the one-zero command. If you're using a speakerphone, please pick up the handset before pressing the numbers. Once again, if you have a question, please press one then zero at this time. One moment, please, for your first question. Your first question comes from the line of Matt Fahey from Baird. Please go ahead. Good morning, guys. Could you talk a little more on the Global Ecommerce profitability? You've talked at times about getting to EBITDA positive here, over the last couple of years. With this tough first quarter there, is it possible to be EBITDA positive in Global Ecommerce this year? Good morning. Yes, thanks for the question. Listen, it's a much more challenging environment than we were anticipating. The key is that the team continues to strive for that. We talked a lot about the dynamics here. It is more challenging, but the team is super focused, and the cost actions that we're implementing, will help attain, at best, an opportunity to achieve that. Here's what I'd say. The team's focused on that. That's what they have a plan to do. That's what they're paid to do. You know, clearly, after the first quarter, it's become a higher-risk plan. It is still the focus. There's still a, you know, a credible plan in order to get there. It's a tougher hill to climb than we expected in this environment. Mark, you guys sold Borderfree last year. You know, it sounds like cross-border is by far the most difficult part of this right now. Is there a way to sort of get out of the cross-border business while maintaining the domestic business? Yes. I mean, they're separable and, you know, I'm not gonna comment on any particular portfolio actions. I will say, you know, as I've always said, everything's on the table. That particular dynamic is clearly in our sight. If we can find something that, you know, makes sense for our shareholders, makes sense for our bondholders, makes sense for our customers, we would take that path. I'm not, you know, for obvious reasons, I'm not gonna go a lot deeper than that. I will say that our guidance doesn't rest on that business becoming EBITDA positive. We've de-risked the plan other ways. It's a, it's a good question. You, you know me, I mean, for 10 years, everything's been on the table. Borderfree is a recent example. You know, software was, you know, an example before that. We'll do what's right. 'Cause at the end of the day, if we can't make that business helpful to what we're trying to do in terms of making that overall segment profitable, then, you know, there's got to be a better owner for it. Right. Certainly fair enough. On the SendTech front, you guys talk about the secular decline in mail. How do you think about that going forward? As you think about in terms of volume or whatever the right way is to model that, what kind of% secular decline do you think about for mail as a whole? Yeah, it's a super good question. When we talk about all the time, we play parlor games on the secular decline of mail. The first thing I'd say is we don't see that changing. That we, you know, the secular decline of mail is kind of baked into the wood of the market and baked into the wood of how we think about the business. You know, I tend to think about it around, you know, mid-single-digit decline. That's kind of where it's been gravitating. If you look at it, and I think people lose sight of this. When I started, there was 70 billion pieces of mail in the United States Postal Service network. There was 48 billion pieces of mail last year. You know, it kind of ebbs and flows based on what's going on in the economy. I would think of it, the way we think about it from a corporate modeling perspective is mid-single-digit decline. You know, as you think about that relative to SendTech, you think about the shipping revenue at an absolute level, gaining more than the mailing revenue declining. That's kind of what we're teetering on right now. When we talk about that business getting its nose above water, it's not that we see the secular decline of mail abating. It's just that the shipping revenue, which is a much bigger market, and a market that's growing and we're doing fine in, that absolute growth outpaces the mail decline. We're, you know, last year, SendTech was -1, I think. You can kind of see those dynamics starting to cross. Right. No, that's helpful. As we think about Presort, and you talked there, too, about lower first-class and marketing mail volumes. Do you think about that the same way, or are there any differences there when you think about the secular decline that Presort faces in terms of volume? It is a little bit different in the following sense. You know, SendTech has a very high market share in the mail markets that they trade in, so there's not a lot of headroom for them to grow. You know, they essentially kind of are the market. Presort has a nice market share, but it has headroom to grow. The way we think about Presort dynamics is, first of all, they've got headroom. Secondly, as mail volumes decline, other sortation companies have harder time getting the densities that they need in order to have attractive economics. That becomes target acquisitions, you know, for us. And we're pretty, we're pretty active there. We have a very disciplined process around, you know, tuck-in acquisitions in Presort. It also becomes, as mail volumes decline, harder for our customers to qualify with enough densities, so you can pick up more there. I would say there's classes of product like bound and packet mail and marketing mail that we have a very low share in that there's lots of opportunities for growth. It is different dynamics. I mean, Presort, if you look at the last, you know, several years, has grown more often than not. You know, first quarter was a touch of anomaly. We do think of those businesses, you know, they're similar in that they've got mail dynamics, just they've got different opportunities available to them. I would say the other thing that's true in Presort, there's tremendous productivity opportunities available for us if we can get a little bit of invention, with some of our automation partners, to do more in the sortation facility. It, as I said, it requires invention. It's not something that's commercially available today, but with a little bit of invention, we can do more with less. When you're taking share here, is that typically from other sortation companies or is it from customers who have done it in-house and look to outsource? Where does that share come from? Yes. All of the above. Gotcha. By the way, you know, size, and we had a large customer that made an acquisition. They got larger, and they insourced some. I mean, it's the dynamics run both ways. By and large, it's, you know, through acquisitions, it's through organic types of opportunities as densities become more difficult to qualify. It's just a terrific business. All right. No, that's helpful. Just the last one for Ana, maybe. On that 24 bond maturity, Ana, you know, when you talk about cash that's available, we've asked this question a couple of times in the past, but how much of your cash is available to be used for something like that? How much of your cash is tied up in the system versus how much could be freed to handle a maturity? Yes, very good question. As you know, you know, we finished with a little over $500 million of cash. I would say cash available from that perspective that's not tied up, whether at the bank or international or needed for working capital, you would probably say, I don't know, somewhere around 15% or so of the total cash balance, maybe a little more. In addition to that, of course, as we've mentioned, with the access to our revolver combined, if the capital markets were not available for many macroeconomic reasons out there, we feel comfortable that we can meet that maturity. Again, our preference would be to do the refinancing. I actually wanna add since we're in the cash topic here for a second. As you know, you know, we have the Pitney Bowes Bank. Our bank, given the macro things that are happening in the banking sector, I just wanna touch on that for a minute. Our bank is there for a very specific purpose, and the purpose is to facilitate postage. Our clients deposit in our bank for that purpose, and we have fluctuations in that as volumes shift, as clients come in and out. So far, everything we're seeing is exactly as we anticipated in the changes that we're seeing. We're not seeing anything out of the ordinary. I just thought it would be important to highlight that as we are in this macro environment. No, that's helpful, Ana. Do clients ever try to take money out of the bank or does the money all just go in to prepay postage? The vast majority is for payments of postage, and it's a facilitation, to either feed meters or permit mail for our Presort clients. It's all payments, I mean, at a practical level. I mean, if they're gonna park money, they're not parking it in our bank. They're parking it in their commercial relationships. The money is theirs for a very specific purpose. It moves in and out pretty fast. I mean, the velocity of that is, you know, I think less than 30 days. It's a very fit for purpose bank that customers use in a very specific way. Great. That's very clear. Sorry, Ana, just to clarify, when you said on the $500 million of cash, did you say 15 one five or 55.0% is available? 1 5. Got it. Great. Thanks for all the questions, guys. Thank you. Super good questions. Your next question comes from the line of Ananda Baruah from Loop Capital. Please go ahead. Hey, good morning, guys. Thanks for taking the questions as well. Really appreciate it. Yeah, a few for me also, if I could. Mark, can you remind us, GEC right now, what% of the volumes are domestic versus cross-border? Or what's the best, I guess, what's the most useful way to think about it? Is it parcels? Is it revenue? Is it both? That'd be helpful. Thanks. Yeah. The way I think about it is, first of all, in context of the market opportunity. The market opportunity for domestic parcels, you know, the market that we're chasing after is, you know, probably 10 billion parcels. Think about $5 per. It's a $50 billion market opportunity. It's a super big opportunity, a market opportunity that, you know, traditionally, and we think going forward, although not at the moment, will, you know, grow that 10%-15%. If you look at our business, mix right now, it's probably 75% to, you know,% plus, domestic parcels. It's, it's the biggest portion of the business, by far. You know, cross-border is probably, you know, 20-ish, 15%-20%, of the numbers. You know, I would stress these businesses are separable. You know, they share some structure. They're a sales force. You know, we've broken the businesses. We have the business by EBIT, and we know how to break them apart. You know, what's going on cross-border right now is kind of a double whammy. I mean, exchange rates have continued to be a headwind. That may abate at some point, although with yesterday's news of the Federal Reserve, it doesn't seem like it's going to abate quite as quickly as I would've hoped. Interest rates still relatively high here compared to other countries. As Ana said, we've had, you know, two large customers, who are great customers, we enjoy great relationships with, that as you're inclined to do with some of these larger relationships, have, you know, insourced portions of their business. It, you know, obscures some of the progress that, not some, it obscures the progress that's being made in domestic parcels where we think the market opportunity is. I think it clouds something that, you know, candidly we're trying to work to make very clear to our external investors, both on the equity and the bond side, because it's important in terms of how they think about the business. That's super helpful context. Then just sort of more clarity around, I think there is a remark made, 80% of the GEC pipeline has higher volume, is it higher volume services? High margin. High margin, yeah. Could you unpack that a little bit? How does that stack up, that 80% kind of relative to the last couple of years? Just to get some context around it. I'll answer them in reverse order. It's higher. It's, you know, part of what has happened is. This is a touch of an industry phenomenon. You know, as you, as you guys follow the other industry participants, whether it be Amazon or FedEx or UPS, they all have a little bit more capacity than they need right now. You know, I would say pricing's gotten a little bit more difficult. In that context, you know, we landed a very large client last year that was accretive, you know, so marginal revenue above marginal costs, but it was a big portion of the pipeline. It's, and it's a big chunk of the business. I love having it because you need a couple anchor clients, it certainly skewed the pipeline and it skewed, you know, to a degree, our current revenue mix. I would characterize, you know, what we have now, the 80% higher than history, and certainly higher than the second half of last year, but not, you know, not appreciably. We're focused on the mid-market, again. Mid-market is where there's less price pressures, it's less served. It's, it's a better market for us, you know, to hang out in. In terms of the type of offerings that we have that are higher margin, you know, I would start with digital. You know, particularly since digital has net revenue treatment now as opposed to gross, it's, you know, basically, you know, it's like a software business. It's got those kinds of margins. I would say after that, if you unpack, you know, the rest of the business, cross-border traditionally have been pretty good margins. That obviously has got some pressures at the moment. When you look at domestic parcels, I would say there's a couple of different lenses. One is, you know, over one pound has better margins. From a customer set perspective, middle market has better margins. That's kind of the, on the delivery side, and then obviously returns has good margins as well. It tends to trend heavier in terms of weight, and because it's more complicated, there's a little bit better margin opportunity. I mean, we really tilted the sales force. I mean, we knew with, you know, this large anchor client that we were picking up, we had to, you know, really incent, the sales force towards the higher margin items. The team's done a good job and you can see it in the pipeline. You know, I think it's not likely to evolve much in the second quarter, but I believe it will in the second half. That's a lot of helpful context. Let me ask one more here and then I'll cede the floor. SendTech EBIT growth in 2023 is your expectation. I think you said shipping is now 11% of revenue. Can you just remind us of the shipping margins and I guess the SendTech margins and how you're expecting the SendTech margins to manifest? Sorry, not SendTech. The shipping margins and the traditional meter margins right now, and how you're expecting, you know, how you're expecting how we should expect the meter margins to manifest through the year on the way to that EBIT growth. Thanks. There's different shipping businesses inside of SendTech. There's a subscription software business. It has subscription software types of margins. There's a business that's, you know, adjacent and runs off of the same device as the, you know, as the mailing business. You think about our, you know, our new products, they've got shipping and mailing. Those margins are the same as mailing. Then I would say, you know, we have a systems integration services business around lockers that tends to have a little bit less margin in it. On balance, we do not expect the increase in services, I'm sorry, the increase in shipping revenue to be dilutive. We expect it to be coming at comparable margins, all in, but with some different currents underneath, if that makes sense. It makes your job from a... Yeah. modeling a little bit easier. I wouldn't try to, you know, unlayer it. It's on average, it'll work out the right way. That's super helpful. Really appreciate it. Thanks a lot. Yep. Your next question comes from the line of Anthony Lebiedzinski from Sidoti. Please go ahead. All right. Good morning. This is Stefan Guillaume on for Anthony Lebiedzinski. How you guys doing? Good. How are you? I say, Anthony, your voice changed. On your last conference call, you talked about having a higher than expected volume of lightweight parcels hurting your profitability in Q4. Can you give us an update on whether or not there was a notable change in mix of parcels in Q1 versus Q4 and Q1 last year, and how that may have impacted segment results for GEC? Q4 and Q1 was similar, in terms of the types of weight of parcels. It was down on a year-to-year basis. I think, you know, as I said, we picked up, you know, a large client particular who's traded down in terms of volumes. I think it's baked into the wood. As the new higher margin stuff comes online from the pipeline, it will begin to normalize. Thank you. Are you expecting to bring in additional clients to GEC over the course of this year? Yeah. No, and we did in the first quarter. Ana talked about, I think we had 80 some odd wins, you know, for a good chunk of revenue in the first quarter. Ana can give you the specifics. The pipeline is super good. Pipeline's as good as it's ever been, and it's, you know, as I said, it's trending towards higher margin stuff, not just higher weight, but higher margin stuff. I will say, you know, at the moment the industry's, you know, got more capacity and, you know, some of the larger players... It's a touch surgical. In general, they talk about raising their prices, which is kind of how history works in this market. There's particular lanes, you know, of business or particular kinds of business where they become more aggressive. I would say pricing, you know, which has been kind of only 1 way in this business historically, at the moment is a little bit more challenging. As the industry gets right-sized in terms of capacity, you know, it's our expectation, that the industry will kind of get back to historical pricing actions, which is fairly consistent price increases each year of 5% or 6%. That's, at the moment, that's a little bit more choppy. Thank you. That was helpful. Can you share more details about the facility rationalization? How many locations do you expect to close and when? I'm not gonna get into the specific locations. I will say these are older sites. They weren't automated. They're all close to sites that we've built that are new. We originally thought maybe we needed them, longer term to be kind of, you know, safety valves for the larger sites. The larger sites are operating so incredibly well, we just don't need them. You know, it's, you know... I'm not gonna give the specific sites obviously we're, you know, kind of, sensitive on from a people perspective and, other side, but it's smaller sites that have been, older. They're not automated, and it's just a artifact or the fact that the newer sites are running so well. Couldn't be more pleased with how they're doing. Thank you. Can you comment on labor and transportation costs? Are you seeing signs of stabilization? Yeah, for sure. I mean, I would say two things. I would say the transportation spot market has actually come down pretty substantially over the last year or two, although it was two years ago, it was crazy high. I would say transportation has not only stabilized, it's come down a bit. Labor and wage rates have not come down. Don't expect them to come down. We are becoming more efficient on both dimensions, both labor and transportation. You know, what we're seeing as we get more volume into the network, you can just see the unit costs, both from labor and transportation, come down. It's those dynamics are all kind of headed the right way. It's, you know, as you look at how we contemplate, you know, the long-term plan and you look at the unit costs that are contemplated in the long-term plan and you see the trajectory that we're on, you know, labor, transportation, I would say warehouse as well, the trajectory is exactly the right way. We need the volume, and we need pricing to stabilize a touch. Thank you so much, guys. Thank you. Good questions. Your next question comes from the line of Kartik Mehta from Northcoast Research. Please go ahead. Good morning, Mark. I know you talked a little bit about if it makes sense you'd be willing to separate, cross-border from Global Ecommerce like you've done with other assets in the past. I'm wondering, you know, if you wanted to separate that business, is it not intertwined in terms of facilities and logistics and transportation with domestic? I guess how easy would it be if that made sense? It's not intertwined in any of those dimensions. It does have a sales and some similar operations expense. The logistic rotation, the sites are all distinctive. It's a, listen, I mean, you know, disintegrations are always challenges to them but, you know, this is doable. Mark, you talked a little bit about the changing environment for returns and maybe that's lowering return volume. I'm wondering if you could just talk about maybe the level of decline you've seen in revenue from returns or maybe level of decline you've seen from the volume in returns, if that's starting to happen? I'd say volume's a little bit down, price is a little bit up, weights are a little bit up. It's kind of, you know, the two down, you know, offsetting a little bit. Just on, you talked about obviously gross savings you're anticipating. Can you talk at all about net savings you'd anticipate from the cost-cutting initiatives? Yes. So, the best way to think about this is, you know, we will have actions throughout time. The best way to think about it is, as we are moving here into the next few quarters, we will be taking actions and we anticipate from the new restructuring program that will cost us about $40 million-$50 million. The savings on a run rate basis, think about them on an annualized basis from the restructuring program itself would be savings of fifty- In addition to that, we have specific productivity actions, particularly in the Global Ecommerce segment, that will drive an incremental $25 million. I would also say, I've said this before, we're never done. You're always in the seventh inning as it relates to efficiency actions. You know, we swept up everything we can see to kinda give you the best visibility for what the next year looks like. We're not done. We will continue to work on this. Okay. Mark, 1 last question. The Presort business is a business that's done well. You've done well in it. In the past, you've talked about it's a fragmented business. There's always opportunity for consolidation. I'm wondering, in this environment, kinda, you know, as you look at your liquidity needs and where you are, is that a business that you could see acquiring other businesses to continue consolidation? Or would that not be something you'd look to do in the next 12-18 months? You know, it depends. I mean, I'd say most of the acquisitions that we've seen are, you know, I would say in kind of the $5 million-$10 million range, so they're pretty digestible. A couple of chunkier ones that are out there. It would just depend on the economics. Perfect. I appreciate it. Thank you very much. At this time, there are no more questions. I'd now like to turn the call back to Mr. Lautenbach for any additional remarks. Thanks, operator. Thank you for everyone's attention this morning. I thought the questions were terrific. Obviously, lots going on in our business. I would remiss if I didn't acknowledge the great work that I thought our team did in the first quarter, really across the board. It is a wonderful team, highly focused on serving customers and creating value. I would just close by acknowledging their hard work. We will, similarly, put our heads down and go back to work, and we'll talk to you soon. Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Teleconference. You may now disconnect.