Unisys Announces
2Q FY18 Results; Services Revenue and Backlog Grow Year-Over-Year,
and Total Operating Profit Margin Expands; Company Reaffirms
Full-Year Financial Guidance
Third consecutive
quarter of total revenue growth; Services backlog grows 27 percent
year-over-year
BLUE BELL, Pa., July 31, 2018 /PRNewswire/ --
2Q 2018:
- Total revenue of $667 million
reflects Services revenue growth of 2.1 percent
year-over-year
- The company achieved operating profit margin of 8.1 percent,
up 860 basis points year-over-year and non-GAAP operating
profit(6) margin of 8.3 percent, up 440 basis points
year-over-year
- Net income was $4 million
versus a loss of $42 million in the
prior-year period; Adjusted EBITDA grew 46 percent year-over-year
to $99 million
- Total Contract Value(1) ("TCV") grew 70 percent
year-over-year in the quarter and 120 percent for the first half;
new business TCV rose 102 percent year-over-year in the quarter and
126 percent in the first half
- Services backlog(4) was up 27 percent
year-over-year to $4.6
billion
- Diluted earnings per share was $0.07 versus a diluted loss per share of
$0.83 in the prior-year period;
non-GAAP diluted earnings per share was $0.39 versus $0.06
in the prior-year period
Unisys Corporation (NYSE: UIS) today reported second-quarter
2018 financial results. Total company revenue of $667 million reflects Services revenue growth of
2.1 percent year-over-year. Operating profit margin was 8.1
percent, up 860 basis points year-over-year. Non-GAAP operating
profit margin expanded to 8.3 percent, up 440 basis points
year-over-year.
The company reported strong contract signings with Total
Contract Value (or "TCV") up 70 percent year-over-year for the
quarter and 120 percent for the first half. New business TCV was up
102 percent in the quarter and 126 percent in the first half.
Services backlog was up 27 percent year-over-year to $4.6 billion.
"We are pleased to see solid revenue performance, with our third
consecutive quarter of year-over-year growth, margin expansion for
the company overall and improvements within our Services business,
which saw revenue grow more than 2 percent year-over-year," said
Unisys Chairman, President and CEO Peter A.
Altabef. "Our strong second quarter results indicate
continued progression toward our goals for 2018."
Summary of Second-Quarter 2018
Business Results
Company:
Revenue of $667 million reflected
growth in Services revenue of 2.1 percent year-over-year (total
revenue was down 1.2 percent on a constant-currency(3)
basis).
Operating profit margin was 8.1 percent, up 860 basis points
year-over-year. Non-GAAP operating profit margin was 8.3 percent,
an increase of 440 basis points year-over-year.
Net income for the second quarter was $3.8 million, versus a net loss of $42.0 million in the second quarter of 2017.
Diluted earnings per share was $0.07,
versus a diluted loss per share of $0.83 in the second quarter of 2017. Non-GAAP
diluted earnings per share(10) was $0.39 versus $0.06
in the prior-year period.
Adjusted EBITDA(9) for the second quarter grew 46.4
percent year-over-year to $99.0
million. Adjusted EBITDA margin for the second quarter
expanded by 470 basis points year-over-year to 14.8 percent.
Second quarter cash used in operations was $11.7 million versus $49.2
million used in operations in the second quarter 2017.
Second quarter adjusted free cash flow(12) was
$(4.6) million, versus $(43.5) million in the second quarter of 2017. At
June 30, 2018, the company had
$584 million in cash and cash
equivalents.
TCV grew 70 percent year over year, and new business TCV grew
102 percent. On a cumulative basis for the first half of 2018, TCV
was up 120 percent year over year, with new business TCV up 126
percent year-over-year.
The company reaffirms full-year 2018 guidance for non-GAAP
adjusted revenue of $2.7-2.825
billion (GAAP revenue of $2.75-2.875
billion), non-GAAP operating profit margin of 7.75-8.75 percent
(GAAP operating profit margin of 9.5-10.5 percent) and adjusted
EBITDA margin of 13.7-14.9 percent.
Services:
Services revenue grew 2.1 percent year-over-year (or 0.4 percent
in constant-currency) to $587
million, which represented 88 percent of total
second-quarter revenue. Services backlog grew 27 percent
year-over-year to end the second quarter at $4.6 billion. Services gross profit margin was up
240 basis points year-over-year, to 16.5 percent, and Services
operating profit margin was up 480 basis points year-over-year to
3.2 percent. Services SG&A was helped in part by the gain on
the sale of a property in the UK.
Technology:
Technology revenue in the second quarter was roughly in line
with company expectations due to the timing of the ClearPath
Forward® renewal schedule at $81
million, down 11.7 percent year-over-year as reported (11.3
percent in constant currency). Technology revenue represented 12
percent of total second-quarter revenue. Technology gross profit
margin for the second quarter was up 830 basis points
year-over-year to 67.1 percent. Technology operating profit margin
was up 960 basis points year-over-year to 45.1 percent. The
improvements to Technology margins were driven in part by a higher
mix of software revenue in the quarter.
Key Second-Quarter Contract
Signings:
In the second quarter, the company entered into several key
contracts in each of its sectors including the following:
- U.S. Federal: During the second quarter, we successfully
implemented a Stealth™ solution for a U.S. federal national
security agency to provide enhanced biometric identity management
capabilities for an international collaboration partner. Unisys'
Stealth® solution was chosen due to its scalable
architecture, allowing for the use of dozens of biometric capture
systems to be integrated with existing law enforcement, national
security and other government credentialing systems.
- Public: Unisys was awarded a contract by the State of Georgia, a new logo, to provide
hybrid cloud services in support of the Georgia Enterprise
Technology Services program. This program provides reliable, secure
and innovative IT infrastructure services to Georgia state and local government
agencies.
- Commercial: A large Australian private health provider signed a
contract for Unisys to provide a Managed Security Information and
Event Management (SIEM) system. The solution includes
technology from Unisys partner LogRhythm, a leader in security
intelligence and analytics. The Unisys solution will allow the
organization to secure its environment by quickly and efficiently
detecting and neutralizing advanced cyber threats before they can
disrupt operations. A Unisys Security Operations Centre will
manage the SIEM and provide 24/7 detection and response
services.
- Financial Services: A leading U.S. financial services holding
company signed an agreement with Unisys for a range of
infrastructure and IT services, including deskside support, service
desk, data center and network management designed to improve the
efficiency of their day-to-day operations and service management
expertise. It was Unisys' largest financial services contract of
the quarter.
Conference Call
Unisys will hold a conference call today at 5:30 p.m. Eastern Time to discuss its results.
The listen-only webcast, as well as the accompanying presentation
materials, can be accessed on the Unisys Investor website at
www.unisys.com/investor. Following the call, an audio replay of the
webcast, and accompanying presentation materials, can be accessed
through the same link.
(1) Total Contract Value – TCV is the
estimated total contractual revenue related to contracts signed in
the period including option years (Federal contracts only) and
without regard for cancellation terms. New business TCV represents
TCV attributable to new scope for existing clients and new logo
contracts.
(2) Annual Contract Value – ACV represents the
revenue expected to be recognized during the first twelve months
following the signing of a contract in the period.
(3) Constant currency – The company refers to
growth rates in constant currency or on a constant currency basis
so that the business results can be viewed without the impact of
fluctuations in foreign currency exchange rates to facilitate
comparisons of the company's business performance from one period
to another. Constant currency is calculated by retranslating
current and prior period results at a consistent rate.
(4) Services Backlog – Services Backlog is the
balance of contracted services revenue not yet recognized,
including only the funded portion of services contracts with the
U.S. Federal government.
Non-GAAP and Other Information
Although appropriate under generally accepted accounting
principles ("GAAP"), the company's results reflect revenue and
charges that the company believes are not indicative of its ongoing
operations and that can make its revenue, profitability and
liquidity results difficult to compare to prior periods,
anticipated future periods, or to its competitors' results. These
items consist of certain portions of revenue, post-retirement and
cost-reduction and other expense. Management believes each of these
items can distort the visibility of trends associated with the
company's ongoing performance. Management also believes that the
evaluation of the company's financial performance can be enhanced
by use of supplemental presentation of its results that exclude the
impact of these items in order to enhance consistency and
comparativeness with prior or future period results. The
following measures are often provided and utilized by the company's
management, analysts, and investors to enhance comparability of
year-over-year results, as well as to compare results to other
companies in our industry.
(5) Non-GAAP adjusted revenue – For the
first half of 2018, the company's non-GAAP results include an
adjustment to exclude certain revenue. The company has excluded
revenue of $53 million. This is
revenue from software license extensions and renewals which were
contracted for in the fourth quarter of 2017 and properly recorded
as revenue at that time under the revenue recognition rules then in
effect (ASC 605). Upon adoption of the new revenue recognition
rules (ASC 606) on January 1, 2018,
and since the company adopted ASC 606 under the modified
retrospective method whereby prior periods were not restated, the
company was required to include this $53
million in the cumulative effect adjustment to retained
earnings on January 1, 2018. ASC 606
requires revenue related to software license renewals or extensions
to be recorded when the new license term begins, which in the case
of the $53 million is January 1, 2018. The company has excluded revenue
and related profit for these software licenses in its non-GAAP
results since it has been previously reported in 2017. This is a
one-time adjustment and it will not reoccur in future periods.
However, in its quarterly financial statements on Form 10-Q for all
of 2018, the company is required to report what its financial
statements would have been if it had not adopted ASC 606. The
$53 million is included in those
adjustments. There are additional adjustments being made, but they
do not represent previously recorded revenue. Those adjustments
represent other differences between ASC 605 and ASC 606,
principally extended payment term software licenses and short-term
software licenses both of which are recorded at the inception of
the license term under ASC 606 but were required to be recognized
ratably over the software license term under ASC 605.
(6) Non-GAAP operating profit - The company
recorded pretax post-retirement expense and pretax charges in
connection with cost-reduction activities and other expenses. For
the company, non-GAAP operating profit excluded these items. The
company believes that this profitability measure is more indicative
of the company's operating results and aligns those results to the
company's external guidance which is used by the company's
management to allocate resources and may be used by analysts and
investors to gauge the company's ongoing performance. In the first
half of 2018, the company included the ASC 606 adjustment discussed
in (5) above.
(7) Non-GAAP adjusted Technology gross
profit margin – In the first half of 2018, the company included
the ASC 606 adjustment discussed in (5) above.
(8) Non-GAAP adjusted Technology operating
profit margin – In the first half of 2018, the company included
the ASC 606 adjustment discussed in (5) above.
(9) EBITDA & adjusted EBITDA – Earnings
before interest, taxes, depreciation and amortization ("EBITDA") is
calculated by starting with net income (loss) attributable to
Unisys Corporation common shareholders and adding or subtracting
the following items: net income attributable to noncontrolling
interests, interest expense (net of interest income), provision for
income taxes, depreciation and amortization. Adjusted EBITDA
further excludes post-retirement expense, cost-reduction and other
expense, non-cash share-based expense, and other (income) expense
adjustment. In order to provide investors with additional
understanding of the company's operating results, these charges are
excluded from the adjusted EBITDA calculation. In the first half of
2018, the company included the ASC 606 adjustment discussed in (5)
above.
(10) Non-GAAP diluted earnings per share - The
company has recorded post-retirement expense and charges in
connection with cost-reduction activities and other expenses.
Management believes that investors may have a better understanding
of the company's performance and return to shareholders by
excluding these charges from the GAAP diluted earnings/loss per
share calculations. The tax amounts presented for these items for
the calculation of non-GAAP diluted earnings per share include the
current and deferred tax expense and benefits recognized under GAAP
for these amounts. In the first half of 2018, the company
included the ASC 606 adjustment discussed in (5) above.
(11) Free cash flow - The company defines free
cash flow as cash flow from operations less capital expenditures.
Management believes this liquidity measure gives investors an
additional perspective on cash flow from on-going operating
activities in excess of amounts used for reinvestment.
(12) Adjusted free cash flow - Because
inclusion of the company's post-retirement contributions and
cost-reduction and other payments in free cash flow may distort the
visibility of the company's ability to generate cash flow from its
operations without the impact of these non-operational costs,
management believes that investors may be interested in adjusted
free cash flow, which provides free cash flow before these
payments. This liquidity measure was provided to analysts and
investors in the form of external guidance and is used by
management to measure operating liquidity.
About Unisys
Unisys is a global information technology company that builds
high-performance, security-centric solutions for the most demanding
businesses and governments on Earth. Unisys offerings include
security software and services; digital transformation and
workplace services; industry applications and services; and
innovative software operating environments for high-intensity
enterprise computing. For more information on how Unisys builds
better outcomes securely for its clients across the Government,
Financial Services and Commercial markets, visit
http://www.unisys.com/.
Forward-Looking Statements
Any statements contained in this release that are not historical
facts are forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include, but are not limited to, any projections of
earnings, revenues, annual contract value, total contract value,
new business ACV or TCV, backlog or other financial items; any
statements of the company's plans, strategies or objectives for
future operations; statements regarding future economic conditions
or performance; and any statements of belief or expectation. All
forward-looking statements rely on assumptions and are subject to
various risks and uncertainties that could cause actual results to
differ materially from expectations. In particular, statements
concerning annual and total contract value are based, in part, on
the assumption that all options of the contracts (Federal only)
included in the calculation of such value will be exercised and
that each of those contracts will continue for their full
contracted term. Risks and uncertainties that could affect the
company's future results include, but are not limited to, the
following: our ability to improve revenue and margins in our
services business; our ability to maintain our installed base and
sell new solutions in our technology business; our ability to
effectively anticipate and respond to volatility and rapid
technological innovation in our industry; our ability to retain
significant clients; the potential adverse effects of aggressive
competition in the information services and technology marketplace;
cybersecurity breaches could result in significant costs and could
harm our business and reputation; our significant pension
obligations and required cash contributions and requirements to
make additional significant cash contributions to our defined
benefit pension plans; our ability to attract, motivate and retain
experienced and knowledgeable personnel in key positions; the risks
of doing business internationally when a significant portion of our
revenue is derived from international operations; our contracts may
not be as profitable as expected or provide the expected level of
revenues; our ability to access financing markets; contracts with
U.S. governmental agencies may subject us to audits, criminal
penalties, sanctions and other expenses and fines; a significant
disruption in our IT systems could adversely affect our business
and reputation; we may face damage to our reputation or legal
liability if our clients are not satisfied with our services or
products; the performance and capabilities of third parties with
whom we have commercial relationships; an involuntary termination
of the company's U.S. qualified defined benefit pension plan; the
potential for intellectual property infringement claims to be
asserted against us or our clients; the business and financial risk
in implementing future acquisitions or dispositions; the adverse
effects of global economic conditions, acts of war, terrorism or
natural disasters; the possibility that pending litigation could
affect our results of operations or cash flow; and the company's
consideration of all available information following the end of the
quarter and before the filing of the Form 10-Q and the possible
impact of this subsequent event information on its financial
statements for the reporting period. Additional discussion of
factors that could affect the company's future results is contained
in its periodic filings with the Securities and Exchange
Commission. The company assumes no obligation to update any
forward-looking statements.
RELEASE NO.: 0731/9606
Unisys and other Unisys products and services mentioned herein,
as well as their respective logos, are trademarks or registered
trademarks of Unisys Corporation. Any other brand or product
referenced herein is acknowledged to be a trademark or registered
trademark of its respective holder.
UIS – Q
UNISYS
CORPORATION |
|
CONSOLIDATED
STATEMENTS OF INCOME |
|
(Unaudited) |
|
(Millions, except
per share data) |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
|
|
2018 |
|
2017 |
|
|
2018 |
|
2017 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
Services |
|
$
586.7 |
|
$
574.8 |
|
|
$ 1,155.2 |
|
$ 1,160.1 |
|
Technology |
|
80.7 |
|
91.4 |
|
|
220.6 |
|
170.6 |
|
|
|
667.4 |
|
666.2 |
|
|
1,375.8 |
|
1,330.7 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
Services |
|
484.2 |
|
510.8 |
* |
|
955.1 |
|
997.2 |
* |
Technology |
|
30.3 |
|
36.7 |
* |
|
66.6 |
|
76.2 |
* |
|
|
514.5 |
|
547.5 |
* |
|
1,021.7 |
|
1,073.4 |
* |
Selling, general and administrative |
|
92.7 |
|
111.4 |
* |
|
183.6 |
|
216.4 |
* |
Research and development |
|
6.2 |
|
10.8 |
* |
|
14.7 |
|
22.6 |
* |
|
|
613.4 |
|
669.7 |
* |
|
1,220.0 |
|
1,312.4 |
* |
Operating profit (loss) |
|
54.0 |
|
(3.5) |
* |
|
155.8 |
|
18.3 |
* |
Interest expense |
|
15.7 |
|
14.3 |
|
|
32.3 |
|
20.0 |
|
Other income (expense), net |
|
(18.0) |
|
(24.5) |
* |
|
(40.6) |
|
(57.4) |
* |
Income (loss) before income taxes |
|
20.3 |
|
(42.3) |
|
|
82.9 |
|
(59.1) |
|
Provision (benefit) for income taxes |
|
14.3 |
|
(3.8) |
|
|
35.2 |
|
9.1 |
|
Consolidated net income (loss) |
|
6.0 |
|
(38.5) |
|
|
47.7 |
|
(68.2) |
|
Net income attributable to noncontrolling
interests |
|
2.2 |
|
3.5 |
|
|
3.3 |
|
6.5 |
|
Net income (loss) attributable to Unisys
Corporation common shareholders |
|
$
3.8 |
|
$
(42.0) |
|
|
$
44.4 |
|
$
(74.7) |
|
Earnings (loss) per share attributable to
Unisys Corporation |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$
0.07 |
|
$ (0.83) |
|
|
$
0.87 |
|
$ (1.48) |
|
Diluted |
|
$
0.07 |
|
$ (0.83) |
|
|
$
0.74 |
|
$ (1.48) |
|
Shares used in the per share computations (in
thousands): |
|
|
|
|
|
|
|
|
|
|
Basic |
|
50,986 |
|
50,437 |
|
|
50,867 |
|
50,346 |
|
Diluted |
|
51,398 |
|
50,437 |
|
|
73,105 |
|
50,346 |
|
|
|
|
|
|
|
|
|
|
|
|
* Certain amounts have been
reclassified to conform to the current-year presentation. |
|
|
|
|
|
UNISYS
CORPORATION |
SEGMENT
RESULTS |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
Eliminations |
|
Services |
|
Technology |
Three Months Ended June 30, 2018 |
|
|
|
|
|
|
|
|
Customer revenue |
|
$
667.4 |
|
$
— |
|
$
586.7 |
|
$
80.7 |
Intersegment |
|
— |
|
(4.0) |
|
— |
|
4.0 |
Total revenue |
|
$ 667.4 |
|
$
(4.0) |
|
$ 586.7 |
|
$
84.7 |
Gross profit percent |
|
22.9 % |
|
|
|
16.5 % |
|
67.1 % |
Operating profit percent |
|
8.1 % |
|
|
|
3.2 % |
|
45.1 % |
Three Months Ended June 30, 2017 |
|
|
|
|
|
|
|
|
Customer revenue |
|
$ 666.2 |
|
$
— |
|
$ 574.8 |
|
$
91.4 |
Intersegment |
|
— |
|
(5.4) |
|
— |
|
5.4 |
Total revenue |
|
$ 666.2 |
|
$
(5.4) |
|
$ 574.8 |
|
$
96.8 |
Gross profit percent |
|
17.8 % |
* |
|
|
14.1 % |
|
58.8 % |
Operating profit (loss) percent |
|
(0.5)% |
* |
|
|
(1.6)% |
|
35.5 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
Eliminations |
|
Services |
|
Technology |
Six Months Ended June 30, 2018 |
|
|
|
|
|
|
|
|
Customer revenue |
|
$
1,375.8 |
|
$
— |
|
$
1,155.2 |
|
$ 220.6 |
Intersegment |
|
— |
|
(14.0) |
|
— |
|
14.0 |
Total revenue |
|
$ 1,375.8 |
|
$ (14.0) |
|
$ 1,155.2 |
|
$ 234.6 |
Gross profit percent |
|
25.7 % |
|
|
|
16.5 % |
|
68.2 % |
Operating profit percent |
|
11.3 % |
|
|
|
3.1 % |
|
51.2 % |
Six Months Ended June 30, 2017 |
|
|
|
|
|
|
|
|
Customer revenue |
|
$ 1,330.7 |
|
$
— |
|
$ 1,160.1 |
|
$ 170.6 |
Intersegment |
|
— |
|
(10.7) |
|
— |
|
10.7 |
Total revenue |
|
$ 1,330.7 |
|
$ (10.7) |
|
$ 1,160.1 |
|
$ 181.3 |
Gross profit percent |
|
19.3 % |
* |
|
|
16.2 % |
|
53.1 % |
Operating profit percent |
|
1.4 % |
* |
|
|
1.5 % |
|
26.1 % |
|
|
|
|
|
|
|
|
|
* Certain amounts have been
reclassified to conform to the current-year presentation. |
|
UNISYS
CORPORATION |
CONSOLIDATED BALANCE
SHEETS |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
June 30,
2018 |
|
December 31,
2017 |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$
584.3 |
|
$
733.9 |
|
Accounts receivable, net |
484.0 |
|
503.3 |
|
Contract assets |
38.3 |
|
— |
|
Inventories: |
|
|
|
|
Parts and finished equipment |
12.5 |
|
13.6 |
|
Work in process and materials |
10.2 |
|
12.5 |
|
Prepaid expenses and other current assets |
117.6 |
|
126.2 |
|
Total current assets |
1,246.9 |
|
1,389.5 |
|
Properties |
855.6 |
|
898.8 |
|
Less-Accumulated depreciation and
amortization |
739.9 |
|
756.3 |
|
Properties, net |
115.7 |
|
142.5 |
|
Outsourcing assets, net |
208.8 |
|
202.3 |
|
Marketable software, net |
150.7 |
|
138.3 |
|
Prepaid postretirement assets |
152.5 |
|
148.3 |
|
Deferred income taxes |
106.5 |
|
119.9 |
|
Goodwill |
178.7 |
|
180.8 |
|
Restricted cash |
16.8 |
|
30.2 |
|
Other long-term assets |
194.3 |
|
190.6 |
|
Total assets |
$
2,370.9 |
|
$
2,542.4 |
|
Liabilities and deficit |
|
|
|
|
Current liabilities: |
|
|
|
|
Current maturities of long-term-debt |
$
10.2 |
|
$
10.8 |
|
Accounts payable |
219.9 |
|
241.8 |
|
Deferred revenue |
284.6 |
|
327.5 |
|
Other accrued liabilities |
319.1 |
|
391.5 |
|
Total current liabilities |
833.8 |
|
971.6 |
|
Long-term debt |
638.1 |
|
633.9 |
|
Long-term postretirement liabilities |
1,886.8 |
|
2,004.4 |
|
Long-term deferred revenue |
177.3 |
|
159.0 |
|
Other long-term liabilities |
79.0 |
|
100.0 |
|
Commitments and contingencies |
|
|
|
|
Total deficit |
(1,244.1) |
|
(1,326.5) |
|
Total liabilities and deficit |
$
2,370.9 |
|
$
2,542.4 |
|
|
|
|
|
|
UNISYS
CORPORATION |
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
(Unaudited) |
|
(Millions) |
|
|
|
|
|
|
|
|
|
Six
Months Ended
June 30, |
|
|
|
2018 |
|
2017 |
|
Cash flows from operating activities |
|
|
|
|
|
Consolidated net income (loss) |
|
$ 47.7 |
|
$ (68.2) |
|
Adjustments to reconcile consolidated net (income)
loss to net cash used for operating activities: |
|
|
|
|
|
Foreign currency transaction losses |
|
1.5 |
|
5.1 |
|
Non-cash interest expense |
|
5.2 |
|
4.4 |
|
Loss on debt extinguishment |
|
— |
|
1.5 |
|
Employee stock compensation |
|
7.3 |
|
6.2 |
|
Depreciation and amortization of properties |
|
21.6 |
|
19.8 |
|
Depreciation and amortization of outsourcing
assets |
|
31.9 |
|
26.3 |
|
Amortization of marketable software |
|
28.6 |
|
31.8 |
|
Other non-cash operating activities |
|
(1.6) |
|
2.5 |
|
Loss on disposal of capital assets |
|
0.3 |
|
4.2 |
|
Gain on sale of properties |
|
(7.1) |
|
— |
|
Postretirement contributions |
|
(72.9) |
|
(76.2) |
* |
Postretirement expense |
|
38.5 |
|
49.2 |
* |
Decrease (increase) in deferred income taxes,
net |
|
8.3 |
|
(0.4) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Receivables, net |
|
(21.2) |
|
(57.4) |
|
Inventories |
|
(0.8) |
|
(2.6) |
|
Accounts payable and other accrued
liabilities |
|
(152.8) |
|
(28.3) |
|
Other liabilities |
|
10.8 |
|
(7.0) |
* |
Other assets |
|
(7.2) |
|
(1.1) |
|
Net cash used for operating activities |
|
(61.9) |
|
(90.2) |
|
Cash flows from investing activities |
|
|
|
|
|
Proceeds from investments |
|
2,028.8 |
|
2,502.0 |
|
Purchases of investments |
|
(2,034.6) |
|
(2,487.1) |
|
Investment in marketable software |
|
(41.1) |
|
(28.8) |
|
Capital additions of properties |
|
(9.9) |
|
(15.9) |
|
Capital additions of outsourcing assets |
|
(42.4) |
|
(36.9) |
|
Net proceeds from sale of properties |
|
19.7 |
|
— |
|
Other |
|
(0.9) |
|
(0.3) |
|
Net cash used for investing activities |
|
(80.4) |
|
(67.0) |
|
Cash flows from financing activities |
|
|
|
|
|
Proceeds from issuance of long-term debt |
|
— |
|
445.0 |
|
Issuance costs related to long-term debt |
|
— |
|
(11.7) |
|
Payments of long-term debt |
|
(1.3) |
|
(97.7) |
|
Other |
|
(2.1) |
|
(2.1) |
|
Net cash (used for) provided by financing
activities |
|
(3.4) |
|
333.5 |
|
Effect of exchange rate changes on cash, cash
equivalents and restricted cash |
|
(17.3) |
|
12.8 |
|
(Decrease) increase in cash, cash equivalents
and restricted cash |
|
(163.0) |
|
189.1 |
|
Cash, cash equivalents and restricted cash,
beginning of period |
|
764.1 |
|
401.1 |
|
Cash, cash equivalents and restricted cash, end
of period |
|
$ 601.1 |
|
$ 590.2 |
|
|
|
|
|
|
|
* Certain amounts have been
reclassified to conform to the current-year presentation. |
|
UNISYS
CORPORATION |
|
RECONCILIATION OF
SELECTED GAAP MEASURES TO NON-GAAP MEASURES |
|
(Unaudited) |
|
(Millions, except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
|
Six Months |
|
|
|
|
Ended June
30, |
|
|
Ended June
30, |
|
|
|
|
2018 |
|
2017 |
|
|
2018 |
|
2017 |
|
GAAP net income (loss) attributable
to Unisys Corporation common shareholders |
|
$
3.8 |
|
$
(42.0) |
|
|
$
44.4 |
|
$
(74.7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Topic 606 adjustment: |
pretax |
|
— |
|
— |
|
|
(53.0) |
|
— |
|
|
tax provision |
|
— |
|
— |
|
|
5.3 |
|
— |
|
|
net of tax |
|
— |
|
— |
|
|
(47.7) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Postretirement expense: |
pretax |
|
19.2 |
|
23.0 |
* |
|
38.5 |
|
49.2 |
* |
|
tax provision |
|
0.2 |
|
1.6 |
|
|
0.5 |
|
1.8 |
|
|
net of tax |
|
19.4 |
|
24.6 |
* |
|
39.0 |
|
51.0 |
* |
|
|
|
|
|
|
|
|
|
|
|
|
Cost reduction and other expense: |
pretax |
|
0.7 |
|
29.0 |
|
|
(2.2) |
|
54.4 |
|
|
tax provision |
|
— |
|
(8.5) |
|
|
0.1 |
|
(9.0) |
|
|
net of tax |
|
0.7 |
|
20.5 |
|
|
(2.1) |
|
45.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income attributable to
Unisys Corporation common shareholders |
|
23.9 |
|
3.1 |
* |
|
33.6 |
|
21.7 |
* |
|
|
|
|
|
|
|
|
|
|
|
|
Add interest expense on convertible
notes |
|
4.9 |
|
— |
|
|
9.7 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income attributable to
Unisys Corporation for diluted earnings per share |
|
$
28.8 |
|
$
3.1 |
* |
|
$
43.3 |
|
$
21.7 |
* |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
(thousands) |
|
50,986 |
|
50,437 |
|
|
50,867 |
|
50,346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Plus incremental shares from assumed
conversion: |
|
|
|
|
|
|
|
|
|
|
Employee stock plans |
|
412 |
|
295 |
|
|
370 |
|
341 |
|
|
Convertible notes |
|
21,868 |
|
— |
|
|
21,868 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted weighted average
shares |
|
73,266 |
|
50,732 |
|
|
73,105 |
|
50,687 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per
share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basis |
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) attributable to
Unisys Corporation for diluted earnings per share |
|
$ 3.8 |
|
$ (42.0) |
|
|
$ 54.1 |
|
$ (74.7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Divided by adjusted weighted average
shares |
|
51,398 |
|
50,437 |
|
|
73,105 |
|
50,346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings (loss) per
share |
|
$
0.07 |
|
$ (0.83) |
|
|
$
0.74 |
|
$ (1.48) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basis |
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income attributable to
Unisys Corporation for diluted earnings per share |
|
$ 28.8 |
|
$ 3.1 |
* |
|
$ 43.3 |
|
$ 21.7 |
* |
|
|
|
|
|
|
|
|
|
|
|
|
Divided by Non-GAAP adjusted weighted
average shares |
|
73,266 |
|
50,732 |
|
|
73,105 |
|
50,687 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted earnings per
share |
|
$
0.39 |
|
$
0.06 |
* |
|
$
0.59 |
|
$
0.43 |
* |
|
|
|
|
|
|
|
|
|
|
|
|
* Certain amounts have been
reclassified to conform to the current-year presentation. |
UNISYS
CORPORATION |
|
RECONCILIATION OF
GAAP OPERATING PROFIT TO NON-GAAP OPERATING PROFIT |
|
(Unaudited) |
|
(Millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
|
Six Months |
|
|
|
|
Ended June
30, |
|
|
Ended June
30, |
|
|
|
|
2018 |
|
2017 |
|
|
2018 |
|
2017 |
|
GAAP operating profit
(loss) |
|
$
54.0 |
|
$
(3.5) |
* |
|
$
155.8 |
|
$
18.3 |
* |
Topic 606 adjustment |
|
— |
|
— |
|
|
(53.0) |
|
— |
|
Postretirement expense |
|
0.9 |
|
1.7 |
* |
|
1.9 |
|
3.4 |
* |
Cost reduction and other expense |
|
0.7 |
|
27.8 |
|
|
(2.2) |
|
47.9 |
|
Non-GAAP operating profit |
|
$
55.6 |
|
$
26.0 |
* |
|
$ 102.5 |
|
$
69.6 |
* |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP customer revenue |
|
$ 667.4 |
|
$
666.2 |
|
|
$ 1,375.8 |
|
$ 1,330.7 |
|
Non-GAAP adjusted customer
revenue |
|
$ 667.4 |
|
$ 666.2 |
|
|
$ 1,322.8 |
|
$ 1,330.7 |
|
GAAP operating profit (loss)
% |
|
8.1 % |
|
(0.5)% |
* |
|
11.3 % |
|
1.4 % |
* |
Non-GAAP operating profit
% |
|
8.3 % |
|
3.9 % |
* |
|
7.7 % |
|
5.2 % |
* |
|
|
|
|
|
|
|
|
|
|
|
|
* Certain amounts have been
reclassified to conform to the current-year presentation. |
UNISYS
CORPORATION |
|
RECONCILIATION OF
GAAP TO NON-GAAP |
|
(Unaudited) |
|
(Millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
FREE CASH
FLOW |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
|
Six Months |
|
|
|
|
Ended June
30, |
|
|
Ended June
30, |
|
|
|
|
2018 |
|
2017 |
|
|
2018 |
|
2017 |
|
Cash used for operations |
|
$ (11.7) |
|
$ (49.2) |
|
|
$ (61.9) |
|
$ (90.2) |
|
Additions to marketable software |
|
(22.1) |
|
(15.0) |
|
|
(41.1) |
|
(28.8) |
|
Additions to properties |
|
(4.8) |
|
(7.4) |
|
|
(9.9) |
|
(15.9) |
|
Additions to outsourcing assets |
|
(18.0) |
|
(24.0) |
|
|
(42.4) |
|
(36.9) |
|
Free cash flow |
|
(56.6) |
|
(95.6) |
|
|
(155.3) |
|
(171.8) |
|
Postretirement funding |
|
42.0 |
|
44.5 |
* |
|
72.9 |
|
76.2 |
* |
Cost reduction and other payments |
|
10.0 |
|
7.6 |
|
|
27.0 |
|
28.8 |
|
Adjusted free cash flow |
|
$
(4.6) |
|
$ (43.5) |
* |
|
$ (55.4) |
|
$ (66.8) |
* |
|
|
|
|
|
|
|
|
|
|
|
|
* Certain amounts have been
reclassified to conform to the current-year presentation. |
|
UNISYS
CORPORATION |
|
RECONCILIATION OF
GAAP TO NON-GAAP |
|
(Unaudited) |
|
(Millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
|
Six Months |
|
|
|
|
Ended June
30, |
|
|
Ended June
30, |
|
|
|
|
2018 |
|
2017 |
|
|
2018 |
|
2017 |
|
Net income (loss) attributable to
Unisys Corporation common shareholders |
|
$
3.8 |
|
$
(42.0) |
|
|
$
44.4 |
|
$
(74.7) |
|
Net income attributable to
noncontrolling interests |
|
2.2 |
|
3.5 |
|
|
3.3 |
|
6.5 |
|
Interest expense, net of interest
income of $3.1, $2.2, $6.3, $4.6 respectively** |
|
12.6 |
|
12.1 |
|
|
26.0 |
|
15.4 |
|
Provision (benefit) for income
taxes |
|
14.3 |
|
(3.8) |
|
|
35.2 |
|
9.1 |
|
Depreciation |
|
26.2 |
|
23.1 |
|
|
53.5 |
|
46.1 |
|
Amortization |
|
13.9 |
|
16.1 |
|
|
28.6 |
|
31.8 |
|
EBITDA |
|
$
73.0 |
|
$
9.0 |
|
|
$ 191.0 |
|
$
34.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Topic 606 adjustment |
|
— |
|
— |
|
|
(53.0) |
|
— |
|
Postretirement expense |
|
19.2 |
|
23.0 |
* |
|
38.5 |
|
49.2 |
* |
Cost reduction and other expense |
|
0.7 |
|
29.0 |
|
|
(2.2) |
|
54.4 |
|
Non-cash share based expense |
|
3.3 |
|
2.5 |
|
|
7.3 |
|
6.2 |
|
Other (income) expense
adjustment*** |
|
2.8 |
|
4.1 |
|
|
10.3 |
|
9.6 |
|
Adjusted EBITDA |
|
$
99.0 |
|
$
67.6 |
* |
|
$
191.9 |
|
$ 153.6 |
* |
|
|
|
|
|
|
|
|
|
|
|
|
* Certain amounts have been
reclassified to conform to the current-year presentation. |
|
|
** Included in other (income)
expense, net on the consolidated statements of income |
|
*** Other (income) expense, net as
reported on the consolidated statements of income less
postretirement expense, interest income and items included in cost
reduction and other expense |
|
CONTACT: Investors: Courtney
Holben, Unisys, 215-986-3379,
courtney.holben@unisys.com, Media: John Clendening, Unisys, 214-403-1981,
john.clendening@unisys.com