Unisys Announces
1Q19 Results; Services Revenue Growth Continues with Highest
Quarterly Growth Since 2003; Company Raises Full-Year Guidance for
Non-GAAP Adjusted Revenue and Reaffirms Guidance for Non-GAAP
Operating Profit Margin and Adjusted EBITDA Margin
BLUE BELL, Pa., May 2, 2019 /PRNewswire/ --
- Services revenue grew 7.7% year over year (11.7% on a
constant-currency(3) basis); Services non-GAAP adjusted
revenue(5) grew 7.3% year over year, the
highest quarterly rate since 2003
- Total 1Q19 revenue of $695.8
million versus $708.4 million
in prior-year period (reflective of the additional $53 million of revenue recorded upon adoption of
ASC 606 in 1Q18), up 2.3% on a constant-currency basis; Total
non-GAAP adjusted revenue grew 5.9% year over year, the highest
quarterly rate since 2014
- Services backlog(4) was stable year over year at
$4.7 billion
- Company raises full-year guidance for non-GAAP adjusted
revenue from +1%-+4% year-over-year growth to +2-+5% year-over-year
growth and reaffirms guidance for non-GAAP operating profit margin
and adjusted EBITDA margin
Unisys Corporation (NYSE: UIS) today reported first-quarter
2019 financial results, raised full-year guidance for non-GAAP
adjusted revenue and reaffirmed full-year guidance for non-GAAP
operating profit margin and adjusted EBITDA margin. "We are excited
to see top-line momentum continue, with another quarter of non-GAAP
adjusted revenue growth, including the highest quarterly growth we
have seen in Services since 2003," said Unisys Chairman and CEO
Peter A. Altabef. "We are
maintaining our client-centric focus and delivering transformative,
secure solutions, and we were pleased to see continued traction
with our strategy in the first quarter."
Summary of First-Quarter 2019 Business
Results
Company:
First-quarter 2019 revenue was $695.8
million versus $708.4 million
in prior-year period (reflective of the additional $53 million of revenue recorded upon adoption of
ASC 606, the new revenue recognition rules, in the first quarter of
2018), up 2.3% year over year on a constant-currency basis.
Non-GAAP adjusted revenue grew 5.9% to $693.8 million.
Operating profit margin in the first quarter 2019 was 6.2%. The
non-recurring adjustment required by the adoption of ASC 606
increased operating profit by $53
million and operating profit margin by 700 basis points in
the prior-year period, with overall operating profit margin down
820 basis points year over year as reported. Non-GAAP operating
profit(6) margin was down 80 basis points year over year
to 6.4%. This more modest decline was due largely to
the impact of new business within Services. As seen in recent
quarters, new Services contracts can impact margins, as costs are
incurred ahead of revenue reaching its run rate, and this was the
case during the first quarter 2019.
Net loss for the first quarter 2019 was $19.4 million, versus net income of $40.6 million in the prior-year period. Diluted
loss per share was $0.38, versus
diluted earnings per share of $0.62
in the prior-year period. Prior-year period net income included
$47.7 million, or $0.76 per diluted share, related to the initial
adoption of ASC 606. Non-GAAP diluted earnings per
share(12) was $0.15 versus
$0.19 in the prior-year period,
driven by similar factors as non-GAAP operating income.
Adjusted EBITDA(11) for the first quarter 2019 was
$82.4 million, versus $92.9 million in the prior-year period, driven
largely by the same new business that impacted operating profit.
Net income margin was (2.8)% versus 5.7% in the prior-year period,
largely driven by the initial impact of the adoption of ASC 606,
which contributed 680 basis points to net income margin in the
prior-year period. Adjusted EBITDA margin was 11.9%, versus 14.2%
in the prior-year period, driven by similar factors that impacted
operating income. The year-over-year delta in adjusted EBITDA is
slightly greater than that for non-GAAP operating income due to
lower depreciation and amortization in the first quarter 2019 as
compared to the prior-year period.
First-quarter 2019 cash flow used in operations was $70.4 million versus $50.2
million in the prior-year period, with the year-over-year
decline largely driven by discount-related prepayments of start-up
costs associated with a large new public sector deal and the timing
of collections related to several large Technology and U.S. Federal
contracts signed late in the quarter. Adjusted free cash
flow(14) was $(95.9)
million in the first quarter 2019, versus $(50.8) million in the prior-year period. The
year-over-year decline in adjusted free cash flow was driven by the
same factors that impacted operating cash flow, as well as
increased capex from new business.
In the first quarter 2019, the company had a lighter renewal
schedule than in the prior-year period. Additionally, in the
first quarter 2018, the company signed its largest contract in a
decade. These two factors resulted in Total Contract
Value(1) (or "TCV") in the first quarter 2019
being down 30% year over year. However, at $989 million, TCV was the highest quarterly
amount since that first quarter of 2018. Additionally, new business
TCV, which included the benefit of several large U.S. Federal
deals, was up 3% year over year, even with the benefit of the large
contract in the first quarter of 2018.
Services:
First-quarter 2019 Services revenue grew 7.7% year over year (or
11.7% in constant-currency) to $612.1
million. Services non-GAAP adjusted revenue grew 7.3% year
over year to $610.1 million, marking
the highest level of growth since 2003 for this segment. Services
backlog was stable year over year to end the quarter at
$4.7 billion. As seen in recent
quarters, new Services contracts can impact margins, as costs are
incurred ahead of revenue reaching its run rate, and this was the
case during the first quarter 2019 with an impact of 180 basis
points on Services gross profit margin. As a result, Services gross
profit margin was 15.4%, down 120 basis points year over year, and
Services operating profit margin was 2.5%, down 50 basis points
year over year. Non-GAAP adjusted Services gross
profit(7) margin was 15.2%, down 140 basis points year
over year (impacted by the previously-noted 180-basis-point impact
of new business), and non-GAAP adjusted Services operating
profit(8) margin was 2.2%, down 80 basis points year
over year.
Technology:
In the first quarter of 2018, the company recorded an additional
$53 million of Technology revenue
upon the adoption of ASC 606, which impacted the GAAP
year-over-year compares in the first quarter 2019 for Technology
revenue and margins. Technology revenue was $83.7 million in the first quarter 2019 versus
$139.9 million in the prior-year
period (down 40.2%, or 36.9% in constant currency). Non-GAAP
adjusted Technology revenue for the first quarter 2019 was also
down year over year, as expected due to the ClearPath Forward
renewal schedule, but down a modest 3.7% year over year. Technology
gross profit margin was 58.1% in the first quarter 2019 versus
68.9% in the prior-year period, while Technology operating profit
margin was 34.1% versus 54.7% in the prior-year period. Non-GAAP
adjusted Technology gross profit(9) margin for the first
quarter 2019 increased 620 basis points year over year from 51.9%
to 58.1%. Non-GAAP adjusted Technology operating
profit(10) margin increased 420 basis points year over
year from 29.9% to 34.1%. Non-GAAP adjusted Technology operating
profit dollars were up 1.4% year over year, despite the modest
decline in non-GAAP adjusted Technology revenue, helped by a higher
mix of software versus the prior-year period.
Select First-Quarter Contract
Signings:
In the first quarter, the company entered into several key
contracts in each of its sectors including the following:
- U.S. Federal: Unisys was selected by the U.S. Air Force for an
engagement to provide a package of Digital Workplace Services
through which the Air Force will securely manage, maintain and
monitor its end-user desktop, laptop and mobile devices. To help
the Air Force consolidate multiple service desks with varied tool
sets into a single entity with complete oversight of services,
Unisys will stand up a cloud-based ITSM solution and end-user
device management solution as well as develop and roll out a
self-service portal and call-management solution. Unisys also will
automate security to ensure end-user devices comply with security
rules before they can connect to Air Force networks.
- Public: A large U.S. state government agency expanded the scope
of its existing work with Unisys to include additional cloud
migration work, as part of an initiative to modernize services to
citizens at a lower cost. This work is expected to improve the
reliability, cybersecurity and cost-effectiveness of key state
administrative operations by applying state-of-art IT practices,
while shifting to a consumption-based pricing model to reduce
capital costs.
- Commercial: A Unisys Stealth® reseller signed a
contract with a leading U.S.-based retailer to provide Unisys
Stealth security software, to be used to reduce their attack
surface considerably while also helping them comply with various
regulatory requirements such as PCI and GDPR, across more than
11,000 locations worldwide.
- Financial Services: Unisys renewed and expanded its contract
with Banco Regional de Desenvolvimento do Extremo Sul, where the
client will move to a new ClearPath Forward® solution.
This new environment will enable the bank to process loans faster
and give a better experience to its customers.
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) Total Contract Value – TCV is the
estimated total contractual revenue related to contracts signed in
the period including option years (U.S. 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 – In 2018
and 2019, the company's non-GAAP results reflect adjustments to
exclude certain revenue. In 2018, this includes revenue from
software license extensions and renewals which were contracted for
in 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
$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 was 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. Additionally, the company's
non-GAAP results include 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.
(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.
During 2018 and 2019, the company included the non-GAAP adjustments
discussed in (5) herein.
(7) Non-GAAP adjusted Services gross
profit – During 2018 and 2019, the company included the
adjustments discussed in (5) herein.
(8) Non-GAAP adjusted Services operating
profit – During 2018 and 2019, the company included the
adjustments discussed in (5) herein.
(9) Non-GAAP adjusted Technology gross
profit – In the first quarter of 2018, the company
included the ASC 606 adjustment discussed in (5) herein.
(10) Non-GAAP adjusted Technology operating
profit – In the first quarter of 2018, the company included the
ASC 606 adjustment discussed in (5) herein.
(11) 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.
During 2018 and 2019, the company included the adjustments
discussed in (5) herein.
(12) 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. During 2018 and 2019,
the company included the adjustments discussed in (5) herein.
(13) 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.
(14) 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.
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
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; 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; cybersecurity breaches could result in
significant costs and could harm our business and reputation; the
potential adverse effects of a U.S. Federal government shutdown;
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 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; 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 business and financial risk in
implementing future acquisitions or dispositions; 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 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; the adverse effects of global economic
conditions, acts of war, terrorism or natural disasters 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.: 0502/9676
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, |
|
2019 |
|
2018 |
Revenue |
|
|
|
Services |
$ 612.1 |
|
$ 568.5 |
Technology |
83.7 |
|
139.9 |
|
695.8 |
|
708.4 |
Costs and expenses |
|
|
|
Cost of revenue: |
|
|
|
Services |
511.9 |
|
470.9 |
Technology |
34.0 |
|
36.3 |
|
545.9 |
|
507.2 |
Selling, general and administrative |
98.0 |
|
90.9 |
Research and development |
9.0 |
|
8.5 |
|
652.9 |
|
606.6 |
Operating profit |
42.9 |
|
101.8 |
Interest expense |
15.5 |
|
16.6 |
Other income (expense), net |
(30.4) |
|
(22.6) |
Income (loss) before income taxes |
(3.0) |
|
62.6 |
Provision for income taxes |
13.8 |
|
20.9 |
Consolidated net income (loss) |
(16.8) |
|
41.7 |
Net income attributable to noncontrolling
interests |
2.6 |
|
1.1 |
Net income (loss) attributable to Unisys
Corporation common shareholders |
$
(19.4) |
|
$
40.6 |
Earnings (loss) per share attributable to
Unisys Corporation |
|
|
|
Basic |
$
(0.38) |
|
$
0.80 |
Diluted |
$
(0.38) |
|
$
0.62 |
Shares used in the per share computations (in
thousands): |
|
|
|
Basic |
51,418 |
|
50,748 |
Diluted |
51,418 |
|
72,943 |
UNISYS
CORPORATION |
SEGMENT
RESULTS |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
|
|
|
Total |
|
Eliminations |
|
Services |
|
Technology |
Three Months Ended March 31, 2019 |
|
|
|
|
|
|
|
Customer revenue |
$
695.8 |
|
$
- |
|
$
612.1 |
|
$
83.7 |
Intersegment |
- |
|
(2.4) |
|
- |
|
2.4 |
Total revenue |
$
695.8 |
|
$
(2.4) |
|
$
612.1 |
|
$
86.1 |
Gross profit percent |
21.5 % |
|
|
|
15.4 % |
|
58.1 % |
Operating profit percent |
6.2 % |
|
|
|
2.5 % |
|
34.1 % |
Three Months Ended March 31, 2018 |
|
|
|
|
|
|
|
Customer revenue |
$
708.4 |
|
$
- |
|
$
568.5 |
|
$
139.9 |
Intersegment |
- |
|
(10.0) |
|
- |
|
10.0 |
Total revenue |
$
708.4 |
|
$
(10.0) |
|
$
568.5 |
|
$
149.9 |
Gross profit percent |
28.4 % |
|
|
|
16.6 % |
|
68.9 % |
Operating profit percent |
14.4 % |
|
|
|
3.0 % |
|
54.7 % |
UNISYS
CORPORATION |
CONSOLIDATED BALANCE
SHEETS |
(Unaudited) |
(Millions) |
|
|
|
|
|
March 31, 2019 |
|
December 31,
2018 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$
504.6 |
|
$
605.0 |
Accounts receivable, net |
522.7 |
|
509.2 |
Contract assets |
30.3 |
|
29.7 |
Inventories: |
|
|
|
Parts and finished equipment |
12.3 |
|
14.0 |
Work in process and materials |
12.6 |
|
13.3 |
Prepaid expenses and other current assets |
124.8 |
|
130.2 |
Total current assets |
1,207.3 |
|
1,301.4 |
Properties |
806.4 |
|
800.2 |
Less-Accumulated depreciation and
amortization |
683.8 |
|
678.9 |
Properties, net |
122.6 |
|
121.3 |
Outsourcing assets, net |
216.2 |
|
216.4 |
Marketable software, net |
170.7 |
|
162.1 |
Operating lease right-of-use assets |
115.5 |
|
- |
Prepaid postretirement assets |
151.4 |
|
147.6 |
Deferred income taxes |
111.0 |
|
109.3 |
Goodwill |
177.6 |
|
177.8 |
Restricted cash |
12.2 |
|
19.1 |
Other long-term assets |
200.0 |
|
202.6 |
Total assets |
$
2,484.5 |
|
$
2,457.6 |
Liabilities and deficit |
|
|
|
Current liabilities: |
|
|
|
Current maturities of long-term-debt |
$
7.3 |
|
$
10.0 |
Accounts payable |
213.8 |
|
268.9 |
Deferred revenue |
292.2 |
|
294.4 |
Other accrued liabilities |
348.6 |
|
350.0 |
Total current liabilities |
861.9 |
|
923.3 |
Long-term debt |
667.1 |
|
642.8 |
Long-term postretirement liabilities |
1,927.2 |
|
1,956.5 |
Long-term deferred revenue |
158.1 |
|
157.2 |
Long-term operating lease liabilities |
97.2 |
|
- |
Other long-term liabilities |
55.5 |
|
77.4 |
Commitments and contingencies |
|
|
|
Total deficit |
(1,282.5) |
|
(1,299.6) |
Total liabilities and deficit |
2,484.5 |
|
2,457.6 |
UNISYS
CORPORATION |
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(Unaudited) |
(Millions) |
|
|
|
|
|
Three Months
Ended
March 31, |
|
2019 |
|
2018 |
Cash flows from operating activities |
|
|
|
Consolidated net income (loss) |
$ (16.8) |
|
$ 41.7 |
Adjustments to reconcile consolidated net income
(loss) to net cash used for operating
activities: |
|
|
|
Foreign currency transaction losses |
4.8 |
|
3.3 |
Non-cash interest expense |
2.7 |
|
2.6 |
Employee stock compensation |
4.7 |
|
4.0 |
Depreciation and amortization of properties |
9.2 |
|
11.2 |
Depreciation and amortization of outsourcing
assets |
15.8 |
|
16.1 |
Amortization of marketable software |
9.5 |
|
14.7 |
Other non-cash operating activities |
(0.6) |
|
(0.9) |
Loss on disposal of capital assets |
1.2 |
|
0.2 |
Postretirement contributions |
(23.1) |
|
(30.9) |
Postretirement expense |
23.5 |
|
19.3 |
(Increase) decrease in deferred income taxes,
net |
(3.1) |
|
6.0 |
Changes in operating assets and liabilities: |
|
|
|
Receivables, net |
5.5 |
|
(28.0) |
Inventories |
2.6 |
|
0.8 |
Accounts payable and other accrued
liabilities |
(121.0) |
|
(130.1) |
Other liabilities |
14.8 |
|
21.2 |
Other assets |
(0.1) |
|
(1.4) |
Net cash used for operating activities |
(70.4) |
|
(50.2) |
Cash flows from investing activities |
|
|
|
Proceeds from investments |
893.9 |
|
1,222.7 |
Purchases of investments |
(887.2) |
|
(1,208.7) |
Investment in marketable software |
(18.0) |
|
(19.0) |
Capital additions of properties |
(10.7) |
|
(5.1) |
Capital additions of outsourcing assets |
(29.4) |
|
(24.4) |
Net proceeds from sale of properties |
(0.1) |
|
- |
Other |
(0.4) |
|
(0.4) |
Net cash used for investing activities |
(51.9) |
|
(34.9) |
Cash flows from financing activities |
|
|
|
Proceeds from issuance of long-term debt |
27.7 |
|
- |
Payments of long-term debt |
(8.7) |
|
(0.7) |
Other |
(4.4) |
|
(2.1) |
Net cash provided by (used for) financing
activities |
14.6 |
|
(2.8) |
Effect of exchange rate changes on cash, cash
equivalents and restricted cash |
0.4 |
|
6.8 |
Decrease in cash, cash equivalents and
restricted cash |
(107.3) |
|
(81.1) |
Cash, cash equivalents and restricted cash,
beginning of period |
624.1 |
|
764.1 |
Cash, cash equivalents and restricted cash, end
of period |
$ 516.8 |
|
$ 683.0 |
UNISYS
CORPORATION |
RECONCILIATIONS OF
SELECTED GAAP MEASURES TO NON-GAAP MEASURES |
(Unaudited) |
(Millions, except
per share data) |
|
|
|
|
|
|
|
|
|
Three
Months |
|
|
|
Ended March
31, |
|
|
|
2019 |
|
2018 |
GAAP net income (loss) attributable
to Unisys Corporation common shareholders |
|
$
(19.4) |
|
$
40.6 |
|
|
|
|
|
|
Topic 606 adjustment: |
pretax |
|
- |
|
(53.0) |
|
tax |
|
- |
|
(5.3) |
|
net of tax |
|
- |
|
(47.7) |
|
|
|
|
|
|
Postretirement expense: |
pretax |
|
23.5 |
|
19.3 |
|
tax |
|
0.1 |
|
0.3 |
|
net of tax |
|
23.6 |
|
19.6 |
|
|
|
|
|
|
Cost reduction and other expense: |
pretax |
|
3.6 |
|
(2.9) |
|
tax |
|
0.7 |
|
(0.1) |
|
net of tax |
|
2.9 |
|
(2.8) |
|
minority interest |
|
0.7 |
|
- |
|
net of minority interest |
|
3.6 |
|
(2.8) |
|
|
|
|
|
|
Non-GAAP net income attributable to
Unisys Corporation common shareholders |
|
7.8 |
|
9.7 |
|
|
|
|
|
|
Add interest expense on convertible
notes |
|
- |
|
- |
|
|
|
|
|
|
Non-GAAP net income attributable to
Unisys Corporation for diluted earnings per
share |
|
$
7.8 |
|
$
9.7 |
|
|
|
|
|
|
Weighted average shares
(thousands) |
|
51,418 |
|
50,748 |
|
|
|
|
|
|
Plus incremental shares from assumed
conversion: |
|
|
|
|
Employee stock plans |
|
516 |
|
327 |
|
Convertible notes |
|
- |
|
- |
|
|
|
|
|
|
Non-GAAP adjusted weighted average
shares |
|
51,934 |
|
51,075 |
|
|
|
|
|
|
Diluted earnings (loss) per
share |
|
|
|
|
|
|
|
|
|
|
GAAP basis |
|
|
|
|
GAAP net income (loss) attributable to
Unisys Corporation for diluted earnings per share |
|
$ (19.4) |
|
$
45.4 |
|
|
|
|
|
|
Divided by adjusted weighted average
shares |
|
51,418 |
|
72,943 |
|
|
|
|
|
|
GAAP diluted earnings (loss) per
share |
|
$
(0.38) |
|
$
0.62 |
|
|
|
|
|
|
Non-GAAP basis |
|
|
|
|
Non-GAAP net income attributable to
Unisys Corporation for diluted earnings per share |
|
$
7.8 |
|
$
9.7 |
|
|
|
|
|
|
Divided by Non-GAAP adjusted weighted
average shares |
|
51,934 |
|
51,075 |
|
|
|
|
|
|
Non-GAAP diluted earnings per
share |
|
$
0.15 |
|
$
0.19 |
UNISYS
CORPORATION |
RECONCILIATIONS OF
GAAP TO NON-GAAP |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
FREE CASH
FLOW |
|
|
|
|
|
|
|
|
|
Three
Months |
|
|
|
Ended March
31, |
|
|
|
2019 |
|
2018 |
Cash used for operations |
|
$
(70.4) |
|
$
(50.2) |
Additions to marketable software |
|
(18.0) |
|
(19.0) |
Additions to properties |
|
(10.7) |
|
(5.1) |
Additions to outsourcing assets |
|
(29.4) |
|
(24.4) |
Free cash flow |
|
(128.5) |
|
(98.7) |
Postretirement funding |
|
23.1 |
|
30.9 |
Cost reduction and other payments, net
of reimbursements |
|
9.5 |
|
17.0 |
Adjusted free cash flow |
|
$
(95.9) |
|
$
(50.8) |
UNISYS
CORPORATION |
RECONCILIATIONS OF
GAAP TO NON-GAAP |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
EBITDA |
|
|
|
|
|
|
|
|
|
Three
Months |
|
|
|
Ended March
31, |
|
|
|
2019 |
|
2018 |
Net income (loss) attributable to
Unisys Corporation common shareholders |
|
$
(19.4) |
|
$
40.6 |
Net income attributable to
noncontrolling interests |
|
2.6 |
|
1.1 |
Interest expense, net of interest
income of $2.9, $3.2 respectively* |
|
12.6 |
|
13.4 |
Provision for income taxes |
|
13.8 |
|
20.9 |
Depreciation |
|
25.0 |
|
27.3 |
Amortization |
|
9.5 |
|
14.7 |
EBITDA |
|
$
44.1 |
|
$ 118.0 |
|
|
|
|
|
Topic 606 adjustment |
|
$
- |
|
$ (53.0) |
Postretirement expense |
|
23.5 |
|
19.3 |
Cost reduction and other
expense** |
|
2.5 |
|
(2.9) |
Non-cash share based expense |
|
4.7 |
|
4.0 |
Other (income) expense
adjustment*** |
|
7.6 |
|
7.5 |
Adjusted EBITDA |
|
$
82.4 |
|
$
92.9 |
|
|
|
|
|
|
*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 expense |
|
|
|
Three
Months |
|
|
|
Ended March
31, |
|
|
|
2019 |
|
2018 |
Revenue |
|
|
$ 695.8 |
|
$ 708.4 |
Non-GAAP revenue |
|
|
$ 693.8 |
|
$ 655.4 |
Net income (loss) as a percentage of
revenue |
|
(2.8)% |
|
5.7 % |
Adjusted EBITDA as a percentage of
Non-GAAP revenue |
|
11.9 % |
|
14.2 % |
UNISYS
CORPORATION |
RECONCILIATIONS OF
GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
|
Three
Months |
Services Segment |
|
Ended March
31, |
|
|
2019 |
|
2018 |
GAAP total revenue |
|
$
612.1 |
|
$
568.5 |
Restructuring reimbursement |
|
(2.0) |
|
- |
Non-GAAP revenue |
|
$ 610.1 |
|
$ 568.5 |
|
|
|
|
|
GAAP gross margin |
|
$
94.5 |
|
$
94.1 |
Restructuring reimbursement |
|
(2.0) |
|
- |
Non-GAAP gross margin |
|
$
92.5 |
|
$
94.1 |
|
|
|
|
|
GAAP operating profit |
|
$
15.2 |
|
$
17.1 |
Restructuring reimbursement |
|
(2.0) |
|
- |
Non-GAAP operating profit |
|
$
13.2 |
|
$
17.1 |
|
|
|
|
|
GAAP gross margin % |
|
15.4% |
|
16.6% |
Non-GAAP gross margin % |
|
15.2% |
|
16.6% |
GAAP operating profit % |
|
2.5% |
|
3.0% |
Non-GAAP operating profit % |
|
2.2% |
|
3.0% |
|
|
|
|
|
|
|
Three
Months |
Technology Segment |
|
Ended March
31, |
|
|
2019 |
|
2018 |
GAAP total revenue |
|
$
86.1 |
|
$
149.9 |
Topic 606 adjustment |
|
- |
|
(53.0) |
Non-GAAP revenue |
|
$
86.1 |
|
$
96.9 |
|
|
|
|
|
GAAP gross margin |
|
$
50.0 |
|
$
103.3 |
Topic 606 adjustment |
|
- |
|
(53.0) |
Non-GAAP gross margin |
|
$
50.0 |
|
$
50.3 |
|
|
|
|
|
GAAP operating profit |
|
$
29.4 |
|
$
82.0 |
Topic 606 adjustment |
|
- |
|
(53.0) |
Non-GAAP operating profit |
|
$
29.4 |
|
$
29.0 |
|
|
|
|
|
GAAP gross margin % |
|
58.1% |
|
68.9% |
Non-GAAP gross margin % |
|
58.1% |
|
51.9% |
GAAP operating profit % |
|
34.1% |
|
54.7% |
Non-GAAP operating profit % |
|
34.1% |
|
29.9% |
|
|
|
|
|
|
|
UNISYS
CORPORATION |
RECONCILIATIONS OF
GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING |
(Unaudited) |
(Millions) |
|
|
|
Three
Months |
Total Unisys |
|
Ended March
31, |
|
|
2019 |
|
2018 |
GAAP total revenue |
|
$
695.8 |
|
$
708.4 |
Topic 606 adjustment |
|
- |
|
(53.0) |
Restructuring reimbursement |
|
(2.0) |
|
- |
Non-GAAP revenue |
|
$ 693.8 |
|
$ 655.4 |
|
|
|
|
|
GAAP gross margin |
|
$
149.9 |
|
$
201.2 |
Topic 606 adjustment |
|
- |
|
(53.0) |
Restructuring reimbursement |
|
(2.0) |
|
- |
Cost reduction expense |
|
(3.7) |
|
(3.0) |
Non-GAAP gross margin |
|
$ 144.2 |
|
$ 145.2 |
|
|
|
|
|
GAAP operating profit |
|
$
42.9 |
|
$
101.8 |
Topic 606 adjustment |
|
- |
|
(53.0) |
Restructuring reimbursement |
|
(2.0) |
|
- |
Postretirement expense |
|
0.8 |
|
1.0 |
Cost reduction expense |
|
2.6 |
|
(2.9) |
Non-GAAP operating profit |
|
$
44.3 |
|
$
46.9 |
|
|
|
|
|
GAAP gross margin % |
|
21.5% |
|
28.4% |
Non-GAAP gross margin % |
|
20.8% |
|
22.2% |
GAAP operating profit % |
|
6.2% |
|
14.4% |
Non-GAAP operating profit % |
|
6.4% |
|
7.2% |
CONTACT: Investors: Courtney
Holben, Unisys, 215-986-3379, courtney.holben@unisys.com;
Media: John Clendening, Unisys,
214-403-1981, john.clendening@unisys.com