Unisys Announces
First-Quarter Results; Completes U.S. Federal Sale; Strong Balance
Sheet and Liquidity Position
BLUE BELL, Pa., April 28, 2020 -- Beginning January 1, 2020, the historical results of the
company's U.S. Federal business have been reflected in the
company's consolidated financial statements as discontinued
operations. Prior-period financial statements have been
reclassified to reflect the company's U.S. Federal business as
discontinued operations. Throughout this release we will only refer
to the company's continuing operations.
-
Closed sale of U.S. Federal business
on March 13, 2020; $1.2 billion of proceeds
-
Technology revenue growth of 11.2%
year over year, ahead of internal expectations
-
Operating profit margin of 3.9%,
relative to 4.5% in prior-year period, due to restructuring
charges
-
Loss per share from continuing
operations of $0.85 versus
$0.64 in prior-year period, due to
higher cost-reduction and other charges in 1Q20
-
Company withdraws guidance in light of
the current COVID-19 pandemic
Unisys Corporation (NYSE: UIS) today reported first-quarter
2020 financial results. "The world has changed dramatically in a
few short weeks, and I am proud of how our company and associates
have responded to these unprecedented times. Our Unisys
Stealth® security offerings, including Unisys Always-On
Access™ powered by Stealth™ which is a next-generation solution
that has advantages over many VPN options, and our InteliServe™
digital workplace solution and its ability to remotely manage
operations, address many client needs arising out of this
situation," said Unisys Chairman and CEO Peter A. Altabef. "We also closed the sale of
our U.S. Federal business on March 13,
2020, which significantly strengthened our balance sheet and
increased capital structure flexibility."
First-Quarter 2020 Highlights
|
|
|
|
Revenue Growth |
|
|
|
Profitability |
|
|
|
|
Revenue
Growth |
Services
Revenue
Growth |
Technology
Revenue
Growth |
|
|
|
Operating
Profit
Margin |
|
Net Income
Margin |
|
Adj. EBITDA
Margin |
|
Diluted EPS |
GAAP |
|
|
(7.1%) |
(10.1%) |
11.2% |
|
GAAP |
3.9% |
|
(10.3%) |
|
|
|
($0.85) |
Constant-Currency (GAAP) |
(5.3%) |
(8.5%) |
13.2% |
|
|
YoY Change |
(60) bps |
|
(440) bps |
|
|
|
(32.8%) |
Non-GAAP |
|
|
(6.9%) |
(10.0%) |
N/A |
|
Non-GAAP |
5.5% |
|
0.1% |
|
13.9% |
|
$0.01 |
|
|
|
|
|
|
|
|
|
YoY Change |
70 bps |
|
110 bps |
|
220 bps |
|
N/M |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Throughout this
release we will only refer to the company's continuing
operations. |
Summary of First-Quarter 2020 Business
Results
Company:
First-quarter revenue was $515.4
million, versus $554.5 million
in the prior-year period down 7.1% year over year (down 5.3% on a
constant-currency(1) basis). Non-GAAP adjusted
revenue(2) was $514.5
million, relative to $552.5
million in the prior-year period. Revenue results were
slightly ahead of the company's internal expectations, with several
Technology contracts being renewed sooner than expected, helping
offset anticipated declines in the company's check-processing
business. COVID-19 had a negative impact on revenue in March,
largely resulting from decreased demand for field services and
declines in volume-based contracts.
First-quarter total company operating profit was $20.1 million, versus $25.2 million in the prior-year period, and
operating profit margin was 3.9%, versus 4.5% in the first quarter
of 2019, in both cases due to higher cost-reduction and other
charges in the first quarter 2020. Total company non-GAAP operating
profit increased 7.1% year over year to $28.5 million, versus $26.6 million in the prior-year period, and
non-GAAP operating profit margin increased 70 basis points year
over year to 5.5%, versus 4.8% in the first quarter of
2019.
Net loss for the first quarter was $53.2
million versus $32.7 million
in the prior-year period, driven by cost-reduction and other
charges being $26.7 million higher in
the first quarter of 2020, relative to the prior-year period.
Similarly, the loss per share was $0.85, compared to loss per share of $0.64 in the prior-year period, driven by those
same cost-reduction and other charges. Non-GAAP net income for the
first quarter was $0.7 million,
versus a net loss of $5.5 million in
the prior-year period. Non-GAAP diluted earnings per share was
$0.01, versus a net loss per share of
$0.11 in the prior-year
period.
Adjusted EBITDA(6) was up 10.4% year over year to
$71.4 million, relative to
$64.7 million in the prior-year
period. Net income margin was (10.3)%, compared to (5.9)% in the
prior-year period, driven by the charges noted above. Adjusted
EBITDA margin increased 220 basis points in the first quarter to
13.9%, relative to 11.7% in the prior-year period.
First-quarter cash used in operations and free cash flow were
impacted by approximately $300
million of voluntary pension contributions to the U.S.
pension plans from the proceeds of the sale of the U.S. Federal
business. First-quarter cash used in operations was $377.9 million, versus $70.4 million in the prior-year period. Free cash
flow(8) was $(405.6)
million, compared to $(128.5)
million in the prior-year period. Adjusted free cash
flow(9) was $(68.1)
million, versus $(95.9)
million in the prior-year period. At March 31, 2020, the company had $789.6 million in cash and cash equivalents. This
does not include an additional $487.3
million in restricted cash that was earmarked for the
redemption of the company's $440
million senior secured notes that took place on April 15, 2020.
In light of the macroeconomic uncertainty due to the COVID-19
crisis, the company is withdrawing its previously-provided
full-year 2020 financial guidance.
Services:
Services revenue in the first quarter was $425.9 million, relative to $474.0 million in the prior-year period, down
10.1% year over year (down 8.5% in constant-currency).
First-quarter Services non-GAAP adjusted revenue was $425.0 million, relative to $472.0 million in the prior-year period. Both
year-over-year declines were directionally in line with internal
expectations. Revenue at the company's check-processing JV declined
as expected, foreign currency was unfavorable and revenue was
impacted by the COVID-19-related items noted above. First-quarter
Services gross profit margin was 12.9%, versus 15.1% in the first
quarter of 2019, and first-quarter Services operating profit margin
was (3.3)%, versus (0.3)% in the first quarter of 2019.
First-quarter non-GAAP adjusted Services gross profit(4)
margin was 12.7%, versus 14.7% in the prior-year period, and
first-quarter non-GAAP adjusted Services operating
profit(5) margin was (3.5)%, versus (0.7)% in the
prior-year period. The year-over-year margin declines were largely
due to the flow-through impact of decreased demand for field
services and declines in volume-based contracts, as well as delays
in implementation of cost-saving initiatives that were expected to
be undertaken early in the year. Services backlog was $3.7 billion, relative to $3.8 billion at year-end 2019 and up 1% versus
year-end 2019 on a constant-currency basis.
Technology:
First-quarter Technology revenue was up 11.2% year over year to
$89.5 million, relative to
$80.5 million in the prior-year
period (13.2% growth in constant currency), due to several
ClearPath Forward® contracts being renewed sooner than
expected. First-quarter Technology gross profit margin was 68.4%,
up 1030 basis points compared to 58.1% in the prior-year period.
Technology operating profit margin was 45.9%, up 1180 basis points
versus 34.1% in the prior-year period.
Select First-Quarter Contract Signings:
In the first quarter, the company entered into several noteworthy
contracts:
-
Focus on InteliServe™: A large, global frozen-food company – a
new client for Unisys – signed a contract for digital workplace
services powered by InteliServe™. Under the agreement, Unisys will
optimize, modernize and provide greater transparency into
technology operations. InteliServe will enhance the user experience
within traditional services such as service desk or field services,
as well as enable greater productivity and collaboration across
business unit applications and processes such as human resources,
compliance and finance.
-
Focus on CloudForte®: Unisys expanded a contract with
the California State University
(CSU) for CloudForte® and
Managed Security Services to support CSU's hybrid-cloud environment with new CloudForte
capabilities to help CSU integrate its
hybrid cloud information resources to deliver more educational and
administrative services across all 23 campuses. The services are
designed to provide a better user experience to more than 484,000
students and 52,000 faculty, while enhancing operational
efficiencies and reducing costs.
-
Focus on Security Services: Unisys signed a $140 million contract with a major commercial
defense contractor – also a new client for Unisys – to provide
comprehensive cross-functional IT services including Unisys
Stealth® security software to protect data across
unclassified and classified IT environments. The services and
software will help the client optimize how they deliver services to
their business partners.
Conference Call
Unisys will hold a conference call today at 5:00 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) 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.
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, debt exchange and
cost-reduction and other expenses. 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.
(2) Non-GAAP adjusted revenue – In 2019
and 2020, the company's non-GAAP results reflect adjustments to
exclude certain revenue and related profit relating to
reimbursements from the company's check-processing JV partners for
restructuring expenses included as part of the company's
restructuring program.
(3) Non-GAAP operating profit – The
company recorded pretax post-retirement expense and pretax charges
in connection with cost-reduction activities, debt exchange 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.
During 2019 and 2020, the company included the non-GAAP adjustments
discussed in (2) herein.
(4) Non-GAAP adjusted Services gross
profit – During 2019 and 2020, the company included the
adjustments discussed in (2) herein.
(5) Non-GAAP adjusted Services operating
profit – During 2019 and 2020, the company included the
adjustments discussed in (2) herein.
(6) EBITDA & adjusted EBITDA –
Earnings before interest, taxes, depreciation and amortization
("EBITDA") is calculated by starting with net income (loss) from
continuing operations 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,
debt exchange, and cost-reduction and other expenses, 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. During 2019 and 2020, the company
included the adjustments discussed in (2) herein.
(7) Non-GAAP diluted earnings per
share – The company has recorded post-retirement expense
and charges in connection with debt exchange and 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. During 2019
and 2020, the company included the adjustments discussed in (2)
herein.
(8) 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.
(9) Adjusted free cash flow – Because
inclusion of the company's post-retirement contributions and
cost-reduction charges/reimbursements 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.
(10) Net Leverage – Includes pension
deficit based on 12/31/19 valuation,
pro forma for $300 million of
voluntary pension contributions made as of 3/31/20.
12/31/19 LTM Adj. EBITDA based on
total company reported Adj. EBITDA. 3/31/20 LTM Adj. EBITDA pro forma for sale of
U.S. Federal for full LTM period.
About Unisys
Unisys is a global information technology company that builds
high-performance, security-centric solutions for the most demanding
businesses and governments. 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 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 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 business and results of operations will be, and our
financial condition may be, impacted by the outbreak of COVID-19
and such impact could be materially adverse, our ability to improve
revenue and margins in our services business; our ability to
maintain our installed base and sell new solutions; the potential
adverse effects of aggressive competition in the information
services and technology marketplace; 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 effectively anticipate and
respond to volatility and rapid technological innovation in our
industry; our ability to retain significant clients; our contracts
may not be as profitable as expected or provide the expected level
of revenues; the risks of doing business internationally when a
significant portion of our revenue is derived from international
operations; our ability to access financing markets; the adverse
effects of a reduction in our credit rating; cybersecurity breaches
could result in significant costs and could harm our business and
reputation; we may not achieve the operational and financial
results that we anticipate from the sale of our U.S. Federal
business; the business and financial risk in implementing future
acquisitions or dispositions; the adverse effects of global
economic conditions, acts of war, terrorism, natural disasters or
the widespread outbreak of infectious diseases; the impact of
Brexit could adversely affect the company's operations in the
United Kingdom as well as the
funded status of the company's U.K. pension plans; our ability to
attract, motivate and retain experienced and knowledgeable
personnel in key positions; 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; our ability to use our net operating loss
carryforwards and certain other tax attributes may be limited; an
involuntary termination of the company's U.S. qualified defined
benefit pension plans; the potential for intellectual property
infringement claims to be asserted against us or our clients; the
possibility that legal proceedings could affect our results of
operations or cash flow or may adversely affect our business or
reputation; 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.: 0428/9765
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
March 31, |
|
2020 |
|
2019 |
Revenue |
|
|
|
Services |
$ 425.9 |
|
$ 474.0 |
Technology |
89.5 |
|
80.5 |
|
515.4 |
|
554.5 |
Costs and expenses |
|
|
|
Cost of revenue: |
|
|
|
Services |
375.7 |
|
396.8 |
Technology |
26.6 |
|
32.6 |
|
402.3 |
|
429.4 |
Selling, general and administrative |
86.8 |
|
90.9 |
Research and development |
6.2 |
|
9.0 |
|
495.3 |
|
529.3 |
Operating profit |
20.1 |
|
25.2 |
Interest expense |
13.9 |
|
15.5 |
Other income (expense), net |
(48.1) |
|
(30.4) |
Loss from continuing operations before income
taxes |
(41.9) |
|
(20.7) |
Provision for income taxes |
10.8 |
|
9.4 |
Consolidated net loss from continuing
operations |
(52.7) |
|
(30.1) |
Net income attributable to noncontrolling
interests |
0.5 |
|
2.6 |
Net loss from continuing operations
attributable to Unisys Corporation |
(53.2) |
|
(32.7) |
Income from discontinued operations, net of
tax |
1,068.5 |
|
13.3 |
Net income (loss) attributable to Unisys
Corporation |
$ 1,015.3 |
|
$
(19.4) |
Earnings (loss) per share attributable to
Unisys Corporation |
|
|
|
Basic |
|
|
|
Continuing operations |
$ (0.85) |
|
$ (0.64) |
Discontinuing operations |
17.06 |
|
0.26 |
Total |
$
16.21 |
|
$
0.38 |
Diluted |
|
|
|
Continuing operations |
$ (0.85) |
|
$ (0.64) |
Discontinuing operations |
17.06 |
|
0.26 |
Total |
$
16.21 |
|
$
(0.38) |
UNISYS
CORPORATION |
SEGMENT
RESULTS |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
|
|
|
Total |
|
Eliminations |
|
Services |
|
Technology |
Three Months Ended March 31, 2020 |
|
|
|
|
|
|
|
Customer revenue |
$
515.4 |
|
$
- |
|
$
425.9 |
|
$
89.5 |
Intersegment |
- |
|
(2.5) |
|
- |
|
2.5 |
Total revenue |
$
515.4 |
|
$
(2.5) |
|
$
425.9 |
|
$
92.0 |
Gross profit percent |
21.9 % |
|
|
|
12.9 % |
|
68.4 % |
Operating profit (loss) percent |
3.9 % |
|
|
|
(3.3)% |
|
45.9 % |
Three Months Ended March 31, 2019 |
|
|
|
|
|
|
|
Customer revenue |
$
554.5 |
|
$
- |
|
$
474.0 |
|
$
80.5 |
Intersegment |
- |
|
(2.4) |
|
- |
|
2.4 |
Total revenue |
$
554.5 |
|
$
(2.4) |
|
$
474.0 |
|
$
82.9 |
Gross profit percent |
22.6 % |
|
|
|
15.1 % |
|
58.1 % |
Operating profit (loss) percent |
4.5 % |
|
|
|
(0.3)% |
|
34.1 % |
UNISYS
CORPORATION |
CONSOLIDATED BALANCE
SHEETS |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
March 31, 2020 |
|
December 31, 2019 |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$
789.6 |
|
$
538.8 |
|
Restricted cash |
487.3 |
|
- |
|
Accounts receivable, net |
421.3 |
|
417.7 |
|
Contract assets |
40.9 |
|
38.4 |
|
Inventories: |
|
|
|
|
Parts and finished equipment |
3.9 |
|
10.8 |
|
Work in process and materials |
6.5 |
|
5.6 |
|
Prepaid expenses and other current assets |
133.8 |
|
100.7 |
|
Current assets of discontinued operations |
- |
|
109.3 |
|
Total current assets |
1,883.3 |
|
1,221.3 |
|
Properties |
759.4 |
|
784.0 |
|
Less-Accumulated depreciation and
amortization |
648.0 |
|
668.0 |
|
Properties, net |
111.4 |
|
116.0 |
|
Outsourcing assets, net |
184.1 |
|
202.1 |
|
Marketable software, net |
190.5 |
|
186.8 |
|
Operating lease right-of-use assets |
71.3 |
|
71.4 |
|
Prepaid postretirement assets |
132.8 |
|
136.2 |
|
Deferred income taxes |
107.7 |
|
114.0 |
|
Goodwill |
108.6 |
|
110.4 |
|
Restricted cash |
10.6 |
|
13.0 |
|
Other long-term assets |
171.3 |
|
198.9 |
|
Long-term assets of discontinued operations |
- |
|
133.9 |
|
Total assets |
$
2,971.6 |
|
$
2,504.0 |
|
Liabilities and deficit |
|
|
|
|
Current liabilities: |
|
|
|
|
Notes payable |
$
59.5 |
|
$
- |
|
Current maturities of long-term-debt |
530.1 |
|
13.5 |
|
Accounts payable |
201.1 |
|
204.3 |
|
Deferred revenue |
224.2 |
|
246.4 |
|
Other accrued liabilities |
296.0 |
|
316.7 |
|
Current liabilities of discontinued
operations |
- |
|
146.4 |
|
Total current liabilities |
1,310.9 |
|
927.3 |
|
Long-term debt |
47.1 |
|
565.9 |
|
Long-term postretirement liabilities |
1,593.9 |
|
1,960.2 |
|
Long-term deferred revenue |
134.9 |
|
147.0 |
|
Long-term operating lease liabilities |
53.5 |
|
56.0 |
|
Other long-term liabilities |
40.7 |
|
47.6 |
|
Long-term liabilities of discontinued
operations |
- |
|
28.3 |
|
Commitments and contingencies |
- |
|
- |
|
Total Unisys Corporation stockholders'
deficit |
(244.7) |
|
(1,265.4) |
|
Noncontrolling interests |
35.3 |
|
37.1 |
|
Total deficit |
(209.4) |
|
(1,228.3) |
|
Total liabilities and deficit |
$
2,971.6 |
|
$
2,504.0 |
|
UNISYS
CORPORATION |
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(Unaudited) |
(Millions) |
|
|
|
|
|
Three Months
Ended
March 31, |
|
2020 |
|
2019 |
Cash flows from operating activities |
|
|
|
Consolidated net loss from continuing
operations |
$ (52.7) |
|
$ (30.1) |
Income from discontinued operations, net of
tax |
1,068.5 |
|
13.3 |
Adjustments to reconcile consolidated net income
(loss) to net cash used for
operating activities: |
|
|
|
Gain on sale of U.S. Federal business |
(1,059.5) |
|
- |
Foreign currency translation losses |
15.8 |
|
4.8 |
Non-cash interest expense |
1.5 |
|
2.7 |
Employee stock compensation |
5.1 |
|
4.7 |
Depreciation and amortization of properties |
8.2 |
|
9.2 |
Depreciation and amortization of outsourcing
assets |
16.0 |
|
15.8 |
Amortization of marketable software |
13.6 |
|
9.5 |
Other non-cash operating activities |
0.2 |
|
(0.6) |
Loss on disposal of capital assets |
0.8 |
|
1.2 |
Postretirement contributions |
(327.7) |
|
(23.1) |
Postretirement expense |
23.5 |
|
23.5 |
Decrease in deferred income taxes, net |
(5.6) |
|
(3.1) |
Changes in operating assets and liabilities: |
|
|
|
Receivables, net |
(18.6) |
|
5.5 |
Inventories |
5.6 |
|
2.6 |
Accounts payable and other accrued
liabilities |
(58.0) |
|
(121.0) |
Other liabilities |
(0.4) |
|
14.8 |
Other assets |
(14.2) |
|
(0.1) |
Net cash used for operating activities |
(377.9) |
|
(70.4) |
Cash flows from investing activities |
|
|
|
Net proceeds from sale of U.S. Federal
business |
1,164.7 |
|
- |
Proceeds from investments |
828.8 |
|
893.9 |
Purchases of investments |
(870.5) |
|
(887.2) |
Investment in marketable software |
(17.3) |
|
(18.0) |
Capital additions of properties |
(5.6) |
|
(10.7) |
Capital additions of outsourcing assets |
(4.8) |
|
(29.4) |
Net proceeds from sale of properties |
- |
|
(0.1) |
Other |
(1.5) |
|
(0.4) |
Net cash provided by (used for) investing
activities |
1,093.8 |
|
(51.9) |
Cash flows from financing activities |
|
|
|
Net proceeds from the issuance of short-term
debt |
59.5 |
|
- |
Proceeds from issuance of long-term debt |
2.1 |
|
27.7 |
Payments of long-term debt |
(6.1) |
|
(8.7) |
Other |
(4.7) |
|
(4.4) |
Net cash provided by financing
activities |
50.8 |
|
14.6 |
Effect of exchange rate changes on cash, cash
equivalents and restricted cash |
(31.0) |
|
0.4 |
Increase (decrease) in cash, cash equivalents
and restricted cash |
735.7 |
|
(107.3) |
Cash, cash equivalents and restricted cash,
beginning of period |
551.8 |
|
624.1 |
Cash, cash equivalents and restricted cash, end
of period |
$ 1,287.5 |
|
$ 516.8 |
UNISYS
CORPORATION |
RECONCILIATION OF
SELECTED GAAP MEASURES TO NON-GAAP MEASURES |
(Unaudited) |
(Millions, except
per share data) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
March 31, |
|
|
|
2020 |
|
2019 |
GAAP net loss from continuing
operations attributable to Unisys Corporation |
|
$
(53.2) |
|
$
(32.7) |
|
|
|
|
|
|
Postretirement expense: |
pretax |
|
23.5 |
|
23.5 |
|
tax |
|
0.3 |
|
(0.1) |
|
net of tax |
|
23.2 |
|
23.6 |
|
|
|
|
|
|
Cost reduction and other expenses: |
pretax |
|
30.9 |
|
3.6 |
|
tax |
|
0.6 |
|
0.7 |
|
net of tax |
|
30.3 |
|
2.9 |
|
minority interest |
|
0.4 |
|
0.7 |
|
net of minority interest |
|
30.7 |
|
3.6 |
|
|
|
|
|
|
Non-GAAP net income (loss) from
continuing operations attributable to Unisys
Corporation |
|
0.7 |
|
(5.5) |
|
|
|
|
|
|
Add interest expense on convertible
notes |
|
- |
|
- |
|
|
|
|
|
|
Non-GAAP net income (loss)
attributable to Unisys Corporation for diluted
earnings per share |
|
$
0.7 |
|
$
(5.5) |
|
|
|
|
|
|
Weighted average shares
(thousands) |
|
62,650 |
|
51,418 |
|
|
|
|
|
|
Plus incremental shares from assumed
conversion: |
|
|
|
|
Employee stock plans |
|
522 |
|
- |
|
Convertible notes |
|
- |
|
- |
|
|
|
|
|
|
Non-GAAP adjusted weighted average
shares |
|
63,172 |
|
51,418 |
|
|
|
|
|
|
Diluted earnings (loss) per share
from continuing operations |
|
|
|
|
|
|
|
|
|
|
GAAP basis |
|
|
|
|
GAAP net loss from continuing
operations attributable to Unisys Corporation
for diluted earnings per share |
|
$ (53.2) |
|
$ (32.7) |
|
|
|
|
|
|
Divided by weighted average
shares |
|
62,650 |
|
51,418 |
|
|
|
|
|
|
GAAP diluted loss per
share |
|
$
(0.85) |
|
$
(0.64) |
|
|
|
|
|
|
Non-GAAP basis |
|
|
|
|
Non-GAAP net income (loss) from
continuing operations attributable to Unisys
Corporation for diluted earnings per share |
|
$
0.7 |
|
$
(5.5) |
|
|
|
|
|
|
Divided by Non-GAAP adjusted weighted
average shares |
63,172 |
|
51,418 |
|
|
|
|
|
|
Non-GAAP diluted earnings (loss)
per share |
$
0.01 |
|
$
(0.11) |
UNISYS
CORPORATION |
RECONCILIATION OF
GAAP TO NON-GAAP |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
FREE CASH
FLOW |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
March 31, |
|
|
|
2020 |
|
2019 |
Cash used for operations |
|
$ (377.9) |
|
$
(70.4) |
Additions to marketable software |
|
(17.3) |
|
(18.0) |
Additions to properties |
|
(5.6) |
|
(10.7) |
Additions to outsourcing assets |
|
(4.8) |
|
(29.4) |
Free cash flow |
|
(405.6) |
|
(128.5) |
Postretirement funding |
|
327.7 |
|
23.1 |
Cost reduction and other payments, net
of reimbursements |
|
9.8 |
|
9.5 |
Adjusted free cash flow |
|
$
(68.1) |
|
$
(95.9) |
UNISYS
CORPORATION |
RECONCILIATION OF
GAAP TO NON-GAAP |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
EBITDA |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
March 31, |
|
|
|
2020 |
|
2019 |
Net loss from continuing operations
attributable to Unisys
Corporation |
|
$
(53.2) |
|
$
(32.7) |
Net income attributable to
noncontrolling interests |
|
0.5 |
|
2.6 |
Interest expense, net of interest
income of $2.4, $2.9, respectively* |
|
11.5 |
|
12.6 |
Provision for income taxes |
|
10.8 |
|
9.4 |
Depreciation |
|
24.2 |
|
25.0 |
Amortization |
|
13.6 |
|
9.5 |
EBITDA |
|
$
7.4 |
|
$
26.4 |
|
|
|
|
|
Postretirement expense |
|
23.5 |
|
23.5 |
Cost reduction and other
expenses** |
|
30.9 |
|
2.5 |
Non-cash share based expense |
|
5.1 |
|
4.7 |
Other (income) expense
adjustment*** |
|
4.5 |
|
7.6 |
Adjusted EBITDA |
|
$
71.4 |
|
$
64.7 |
|
|
|
|
|
|
*Included in other (income) expense,
net on the consolidated statements of income |
**Reduced for depreciation and
amortization included above |
***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 expenses |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
March 31, |
|
|
|
2020 |
|
2019 |
Revenue |
|
|
$ 515.4 |
|
$ 554.5 |
Non-GAAP revenue |
|
|
$ 514.5 |
|
$ 552.5 |
Net loss from continuing operations
attributable to Unisys Corporation as a percentage
of revenue |
|
(10.3)% |
|
(5.9)% |
Non-GAAP net income (loss) from
continuing operations attributable to Unisys
Corporation as a percentage of Non-GAAP revenue |
|
0.1 % |
|
(1.0)% |
Adjusted EBITDA as a percentage of
Non-GAAP revenue |
|
13.9 % |
|
11.7 % |
UNISYS
CORPORATION |
RECONCILIATION OF
GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
|
Three Months
Ended |
Services Segment |
|
March 31, |
|
|
2020 |
|
2019 |
GAAP total revenue |
|
$
425.9 |
|
$
474.0 |
Restructuring reimbursement |
|
(0.9) |
|
(2.0) |
Non-GAAP revenue |
|
$
425.0 |
|
$
472.0 |
|
|
|
|
|
GAAP gross margin |
|
$
54.8 |
|
$
71.5 |
Restructuring reimbursement |
|
(0.9) |
|
(2.0) |
Non-GAAP gross margin |
|
$
53.9 |
|
$
69.5 |
|
|
|
|
|
GAAP operating profit |
|
$
(14.0) |
|
$
(1.4) |
Restructuring reimbursement |
|
(0.9) |
|
(2.0) |
Non-GAAP operating profit |
|
$
(14.9) |
|
$
(3.4) |
|
|
|
|
|
GAAP gross margin % |
|
12.9% |
|
15.1% |
Non-GAAP gross margin % |
|
12.7% |
|
14.7% |
GAAP operating profit % |
|
(3.3%) |
|
(0.3%) |
Non-GAAP operating profit % |
|
(3.5%) |
|
(0.7%) |
|
|
|
|
|
|
|
Three Months
Ended |
Total Unisys |
|
March 31, |
|
|
2020 |
|
2019 |
GAAP total revenue |
|
$
515.4 |
|
$
554.5 |
Restructuring reimbursement |
|
(0.9) |
|
(2.0) |
Non-GAAP revenue |
|
$
514.5 |
|
$
552.5 |
|
|
|
|
|
GAAP gross margin |
|
$ 113.10 |
|
$ 125.10 |
Restructuring reimbursement |
|
(0.9) |
|
(2.0) |
Postretirement expense |
|
- |
|
- |
Cost reduction expense |
|
5.9 |
|
(3.7) |
Non-GAAP gross margin |
|
$
118.1 |
|
$
119.4 |
|
|
|
|
|
GAAP operating profit |
|
$
20.1 |
|
$
25.2 |
Restructuring reimbursement |
|
(0.9) |
|
(2.0) |
Postretirement expense |
|
0.8 |
|
0.8 |
Cost reduction and other expense |
|
8.5 |
|
2.6 |
Non-GAAP operating profit |
|
$
28.5 |
|
$
26.6 |
|
|
|
|
|
GAAP gross margin % |
|
21.9% |
|
22.6% |
Non-GAAP gross margin % |
|
23.0% |
|
21.6% |
GAAP operating profit % |
|
3.9% |
|
4.5% |
Non-GAAP operating profit % |
|
5.5% |
|
4.8% |
CONTACT: Investors: Courtney
Holben, Unisys, 215-986-3379, courtney.holben@unisys.com
or
Media: John Clendening, Unisys,
214-403-1981, john.clendening@unisys.com