Unisys Announces
2Q19 Results; Total Company Revenue Grows At Highest Rate in Over
20 Years and Company Generates Positive Free Cash Flow; Company
Reaffirms Full-Year Guidance
BLUE BELL, Pa., July 30, 2019 /PRNewswire/ --
- Total revenue grew 12.9% year over year (16.5% on a
constant-currency(1) basis)
- Total non-GAAP adjusted revenue(3) grew 12.0%
year over year, the highest quarterly rate in over 20
years
- U.S. Federal sector revenue grew 33.1% year over
year
- Operating profit margin expanded 340 basis points year over
year to 11.5%
- Non-GAAP operating profit(4) margin expanded 370
basis points year over year to 12.0%
- Operating cash flow of $50.9
million, up $62.6 million year
over year
- Free cash flow(11) of $11.3 million, up $67.9
million year over year
- Diluted EPS increased 6 times year over year to $0.42
- Non-GAAP diluted EPS(10) increased 123% year over
year to $0.87
- Company reaffirms full-year guidance
Unisys Corporation (NYSE: UIS) today reported
second-quarter 2019 financial results and reaffirmed full-year
guidance. "We are pleased to see continued revenue growth coupled
with higher non-GAAP operating profit margin and positive free cash
flow this quarter," said Unisys Chairman and CEO Peter A. Altabef. "We are also encouraged by the
ongoing strength in our U.S. Federal sector, which grew revenue
over 33 percent year over year in the second quarter."
Second-Quarter Highlights
|
|
|
|
Revenue Growth |
|
|
|
Profitability |
|
|
|
|
Revenue
Growth |
Services
Revenue
Growth |
Technology
Revenue
Growth |
|
|
|
Operating
Profit
Margin |
|
Net Income
Margin |
|
Adj. EBITDA
Margin |
|
Diluted EPS |
GAAP |
|
|
12.9% |
11.4% |
24.4% |
|
GAAP |
11.5% |
|
3.5% |
|
|
|
$0.42 |
Constant-Currency (GAAP) |
16.5% |
15.0% |
27.3% |
|
|
YoY Change |
340 |
bps |
290 |
bps |
|
|
500% |
Non-GAAP |
|
|
12.0% |
10.3% |
|
|
Non-GAAP |
12.0% |
|
|
|
17.2% |
|
$0.87 |
|
|
|
|
|
|
|
|
|
YoY Change |
370 |
bps |
|
|
240 |
bps |
123% |
U.S. Federal Sector |
|
33.1% |
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Second-Quarter 2019 Business Results
Company:
Second-quarter 2019 revenue grew 12.9% year over year to
$753.8 million versus $667.4 million in the prior-year period (16.5% on
a constant-currency basis). Non-GAAP adjusted revenue grew 12.0% to
$747.3 million, the highest quarterly
growth rate seen in over 20 years.
Operating profit margin in the second quarter expanded 340 basis
points year over year to 11.5%. Non-GAAP operating profit margin
expanded 370 basis points year over year to 12.0%.
Net income for the second quarter 2019 was $26.2 million, up $22.4
million versus $3.8 million in
the prior-year period. Diluted earnings per share was up 6 times
year over year to $0.42, compared to
$0.07 in the prior-year period.
Non-GAAP diluted earnings per share was up 123% year over year to
$0.87 versus $0.39 in the prior-year period.
Adjusted EBITDA(9) grew 29.8% year over year in the
second quarter to $128.5 million,
versus $99.0 million in the
prior-year period. Net income margin was up 290 basis points year
over year to 3.5%, compared to 0.6% in the prior-year period.
Adjusted EBITDA margin was up 240 basis points year over year to
17.2%, versus 14.8% in the prior-year period.
Operating cash flow in the second quarter was $50.9 million, up $62.6
million year over year, versus a use of cash of $11.7 million in the prior-year period. Free cash
flow was $11.3 million, up
$67.9 million year over year,
compared to a use of cash of $56.6
million in the prior-year period. Adjusted free cash
flow(12) was $48.3
million, up $52.9 million year
over year, versus a use of cash of $4.6
million in the prior-year period. At June 30, 2019, the company had $507 million in cash and cash equivalents.
Services:
Services revenue grew 11.4% year over year in the second
quarter (or 15.0% in constant-currency) to $653.4 million. Services non-GAAP adjusted
revenue grew 10.3% year over year to $646.9
million, marking the highest growth rate since 2003 for this
segment. Services gross profit margin was up 130 basis points year
over year to 17.8%, and Services operating profit margin was up 280
basis points to 6.0%. Non-GAAP adjusted Services gross
profit(5) margin was up 40 basis points year over year
to 16.9%, and non-GAAP adjusted Services operating
profit(6) margin was up 190 basis points year over year
to 5.1%, the highest level since 2014. In the second quarter the
noted margins all increased year over year inclusive of the ongoing
impact of transitional business. Services
backlog(2) was $4.3
billion, down 6.8% year over year largely due to a lighter
renewal schedule in the second quarter of 2019 than in the
prior-year period.
Technology:
Technology revenue grew 24.4% year over year in the second quarter
to $100.4 million versus $80.7 million in the prior-year period (up 27.3%
in constant currency). Technology gross profit margin was up 640
basis points year over year to 73.5% compared to 67.1% in the
prior-year period, while Technology operating profit was up 44.2%
year over year, and Technology operating profit margin was up 870
basis points year over year to 53.8% versus 45.1% in the prior-year
period. There were no non-GAAP adjustments in the Technology
segment in the quarter.
Select Second-Quarter Contract Signings:
In the second quarter, the company entered into several contracts
in each of its sectors including the following:
- U.S. Federal: In the second quarter, Unisys signed a contract
to provide support to a Defense Agency to maintain shared
mission-critical IT services for select Department of Defense
agencies and organizations throughout the government. Under this
contract, Unisys will leverage its CloudForte™ solutions to provide
a number of enterprise services including operation and
maintenance, enterprise IT modernization, and security.
- Public: In the second quarter, Unisys signed a contract to
design, build and manage new secure cloud infrastructure and an
upgraded Wide Area Network for Australia's Bureau of Meteorology, a new
client for Unisys, to support a range of products and services to
better inform decision-making by governments, emergency services,
industry and the community.
- Commercial: In the second quarter, Unisys signed a new scope
agreement with India's flag
carrier, Air India, for the Unisys Digistics™ integrated logistics
software suite. Unisys is helping the client create a connected and
automated cargo ecosystem for consistent and accurate data
management, to help improve cash flow for the airline while
creating greater transparency around shipment status for the
airline's cargo clients.
- Financial Services: In the second quarter, Unisys signed a
renewed and expanded agreement with a leading Central American
financial institution to modernize infrastructure capabilities
using the Unisys ClearPath Forward® platform and
development framework in support of their core applications. The
agreement includes on-demand services supporting the bank's core
modernization, designed to give greater flexibility, speed and
services to the bank's 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) 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.
(2) 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.
(3) 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.
(4) 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 (3) herein.
(5) Non-GAAP adjusted Services gross
profit – During 2018 and 2019, the company included the
adjustments discussed in (3) herein.
(6) Non-GAAP adjusted Services operating
profit – During 2018 and 2019, the company included the
adjustments discussed in (3) herein.
(7) Non-GAAP adjusted Technology gross
profit – In the first quarter of 2018, the company
included the ASC 606 adjustment discussed in (3) herein.
(8) Non-GAAP adjusted Technology operating
profit – In the first quarter of 2018, the company included the
ASC 606 adjustment discussed in (3) herein.
(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.
During 2018 and 2019, the company included the adjustments
discussed in (3) herein.
(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. During 2018 and 2019,
the company included the adjustments discussed in (3) herein.
(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 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 significant pension obligations and required
cash contributions and requirements to make additional significant
cash contributions to our defined benefit pension plans; our
ability to access financing markets; 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; 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; the business and
financial risk in implementing future acquisitions or dispositions;
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
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.: 0730/9693
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, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenue |
|
|
|
|
|
|
|
Services |
$ 653.4 |
|
$ 586.7 |
|
$ 1,265.5 |
|
$ 1,155.2 |
Technology |
100.4 |
|
80.7 |
|
184.1 |
|
220.6 |
|
753.8 |
|
667.4 |
|
1,449.6 |
|
1,375.8 |
Costs and expenses |
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
Services |
534.8 |
|
484.2 |
|
1,046.7 |
|
955.1 |
Technology |
25.1 |
|
30.3 |
|
59.1 |
|
66.6 |
|
559.9 |
|
514.5 |
|
1,105.8 |
|
1,021.7 |
Selling, general and administrative |
99.7 |
|
92.7 |
|
197.7 |
|
183.6 |
Research and development |
7.2 |
|
6.2 |
|
16.2 |
|
14.7 |
|
666.8 |
|
613.4 |
|
1,319.7 |
|
1,220.0 |
Operating profit |
87.0 |
|
54.0 |
|
129.9 |
|
155.8 |
Interest expense |
16.2 |
|
15.7 |
|
31.7 |
|
32.3 |
Other income (expense), net |
(28.9) |
|
(18.0) |
|
(59.3) |
|
(40.6) |
Income before income taxes |
41.9 |
|
20.3 |
|
38.9 |
|
82.9 |
Provision for income taxes |
12.1 |
|
14.3 |
|
25.9 |
|
35.2 |
Consolidated net income |
29.8 |
|
6.0 |
|
13.0 |
|
47.7 |
Net income attributable to noncontrolling
interests |
3.6 |
|
2.2 |
|
6.2 |
|
3.3 |
Net income (loss) attributable to Unisys
Corporation common shareholders |
$
26.2 |
|
$
3.8 |
|
6.8 |
|
$
44.4 |
Earnings per share attributable to Unisys
Corporation |
|
|
|
|
|
|
|
Basic |
$
0.51 |
|
$
0.07 |
|
$
0.13 |
|
$
0.87 |
Diluted |
$
0.42 |
|
$
0.07 |
|
$
0.13 |
|
$
0.74 |
Shares used in the per share computations (in
thousands): |
|
|
|
|
|
|
|
Basic |
51,782 |
|
50,986 |
|
51,600 |
|
50,867 |
Diluted |
73,978 |
|
51,398 |
|
52,022 |
|
73,105 |
UNISYS
CORPORATION |
SEGMENT
RESULTS |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
|
|
|
Total |
|
Eliminations |
|
Services |
|
Technology |
Three Months Ended June 30, 2019 |
|
|
|
|
|
|
|
Customer revenue |
$
753.8 |
|
$
- |
|
$
653.4 |
|
$
100.4 |
Intersegment |
- |
|
(2.1) |
|
- |
|
2.1 |
Total revenue |
$
753.8 |
|
$
(2.1) |
|
$
653.4 |
|
$
102.5 |
Gross profit percent |
25.7 % |
|
|
|
17.8 % |
|
73.5 % |
Operating profit percent |
11.5 % |
|
|
|
6.0 % |
|
53.8 % |
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 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
Eliminations |
|
Services |
|
Technology |
Six Months Ended June 30, 2019 |
|
|
|
|
|
|
|
Customer revenue |
$ 1,449.6 |
|
$
- |
|
$ 1,265.5 |
|
$
184.1 |
Intersegment |
- |
|
(4.5) |
|
- |
|
4.5 |
Total revenue |
$ 1,449.6 |
|
$
(4.5) |
|
$ 1,265.5 |
|
$
188.6 |
Gross profit percent |
23.7 % |
|
|
|
16.6 % |
|
66.4 % |
Operating profit percent |
9.0 % |
|
|
|
4.3 % |
|
44.8 % |
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 % |
UNISYS
CORPORATION |
CONSOLIDATED BALANCE
SHEETS |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
June 30,
2019 |
|
December 31,
2018 |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$
507.2 |
|
$
605.0 |
|
Accounts receivable, net |
496.4 |
|
509.2 |
|
Contract assets |
32.7 |
|
29.7 |
|
Inventories: |
|
|
|
|
Parts and finished equipment |
13.5 |
|
14.0 |
|
Work in process and materials |
14.4 |
|
13.3 |
|
Prepaid expenses and other current assets |
141.6 |
|
130.2 |
|
Total current assets |
1,205.8 |
|
1,301.4 |
|
Properties |
814.2 |
|
800.2 |
|
Less-Accumulated depreciation and
amortization |
690.4 |
|
678.9 |
|
Properties, net |
123.8 |
|
121.3 |
|
Outsourcing assets, net |
210.1 |
|
216.4 |
|
Marketable software, net |
177.8 |
|
162.1 |
|
Operating lease right-of-use assets |
134.5 |
|
- |
|
Prepaid postretirement assets |
152.9 |
|
147.6 |
|
Deferred income taxes |
104.0 |
|
109.3 |
|
Goodwill |
177.8 |
|
177.8 |
|
Restricted cash |
10.3 |
|
19.1 |
|
Other long-term assets |
210.8 |
|
202.6 |
|
Total assets |
$
2,507.8 |
|
$
2,457.6 |
|
Liabilities and deficit |
|
|
|
|
Current liabilities: |
|
|
|
|
Current maturities of long-term-debt |
$
7.5 |
|
$
10.0 |
|
Accounts payable |
233.5 |
|
268.9 |
|
Deferred revenue |
288.3 |
|
294.4 |
|
Other accrued liabilities |
342.4 |
|
350.0 |
|
Total current liabilities |
871.7 |
|
923.3 |
|
Long-term debt |
668.6 |
|
642.8 |
|
Long-term postretirement liabilities |
1,888.0 |
|
1,956.5 |
|
Long-term deferred revenue |
147.0 |
|
157.2 |
|
Long-term operating lease liabilities |
96.1 |
|
- |
|
Other long-term liabilities |
50.1 |
|
77.4 |
|
Commitments and contingencies |
|
|
|
|
Total deficit |
(1,213.7) |
|
(1,299.6) |
|
Total liabilities and deficit |
$
2,507.8 |
|
$
2,457.6 |
|
UNISYS
CORPORATION |
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(Unaudited) |
(Millions) |
|
|
|
|
|
Six Months Ended
June 30, |
|
2019 |
|
2018 |
Cash flows from operating activities |
|
|
|
Consolidated net income |
$ 13.0 |
|
$ 47.7 |
Adjustments to reconcile consolidated net income
to net cash used for operating activities: |
|
|
|
Foreign currency transaction losses |
5.3 |
|
1.5 |
Non-cash interest expense |
5.4 |
|
5.2 |
Employee stock compensation |
7.3 |
|
7.3 |
Depreciation and amortization of properties |
17.8 |
|
21.6 |
Depreciation and amortization of outsourcing
assets |
31.7 |
|
31.9 |
Amortization of marketable software |
21.6 |
|
28.6 |
Other non-cash operating activities |
(0.2) |
|
(1.6) |
Loss on disposal of capital assets |
1.3 |
|
0.3 |
Gain on sale of properties |
- |
|
(7.1) |
Postretirement contributions |
(47.7) |
|
(72.9) |
Postretirement expense |
47.1 |
|
38.5 |
Decrease in deferred income taxes, net |
2.7 |
|
8.3 |
Changes in operating assets and liabilities: |
|
|
|
Receivables, net |
10.1 |
|
(21.2) |
Inventories |
(0.3) |
|
(0.8) |
Accounts payable and other accrued
liabilities |
(140.3) |
|
(152.8) |
Other liabilities |
16.9 |
|
10.8 |
Other assets |
(11.2) |
|
(7.2) |
Net cash used for operating activities |
(19.5) |
|
(61.9) |
Cash flows from investing activities |
|
|
|
Proceeds from investments |
1,704.1 |
|
2,028.8 |
Purchases of investments |
(1,706.9) |
|
(2,034.6) |
Investment in marketable software |
(37.2) |
|
(41.1) |
Capital additions of properties |
(20.8) |
|
(9.9) |
Capital additions of outsourcing assets |
(39.7) |
|
(42.4) |
Net proceeds from sale of properties |
(0.2) |
|
19.7 |
Other |
(0.4) |
|
(0.9) |
Net cash used for investing activities |
(101.1) |
|
(80.4) |
Cash flows from financing activities |
|
|
|
Proceeds from issuance of long-term debt |
28.1 |
|
- |
Payments of long-term debt |
(10.5) |
|
(1.3) |
Other |
(4.5) |
|
(2.1) |
Net cash provided by (used for) financing
activities |
13.1 |
|
(3.4) |
Effect of exchange rate changes on cash, cash
equivalents and restricted cash |
0.9 |
|
(17.3) |
Decrease in cash, cash equivalents and
restricted cash |
(106.6) |
|
(163.0) |
Cash, cash equivalents and restricted cash,
beginning of period |
624.1 |
|
764.1 |
Cash, cash equivalents and restricted cash, end
of period |
$ 517.5 |
|
$ 601.1 |
UNISYS
CORPORATION |
RECONCILIATIONS OF
SELECTED GAAP MEASURES TO NON-GAAP MEASURES |
(Unaudited) |
(Millions, except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
GAAP net income attributable to
Unisys Corporation common shareholders |
|
$
26.2 |
|
$
3.8 |
|
$
6.8 |
|
$
44.4 |
|
|
|
|
|
|
|
|
|
|
Topic 606 adjustment: |
pretax |
|
- |
|
- |
|
- |
|
(53.0) |
|
tax |
|
- |
|
- |
|
- |
|
5.3 |
|
net of tax |
|
- |
|
- |
|
- |
|
(47.7) |
|
|
|
|
|
|
|
|
|
|
Postretirement expense: |
pretax |
|
23.6 |
|
19.2 |
|
47.1 |
|
38.5 |
|
tax |
|
- |
|
0.2 |
|
0.1 |
|
0.5 |
|
net of tax |
|
23.6 |
|
19.4 |
|
47.2 |
|
39.0 |
|
|
|
|
|
|
|
|
|
|
Cost reduction and other expense: |
pretax |
|
7.0 |
|
0.7 |
|
10.6 |
|
(2.2) |
|
tax |
|
(0.3) |
|
- |
|
(1.0) |
|
0.1 |
|
net of tax |
|
6.7 |
|
0.7 |
|
9.6 |
|
(2.1) |
|
minority interest |
|
2.5 |
|
- |
|
3.2 |
|
- |
|
net of minority interest |
|
9.2 |
|
0.7 |
|
12.8 |
|
(2.1) |
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income attributable to
Unisys Corporation common shareholders |
|
59.0 |
|
23.9 |
|
66.8 |
|
33.6 |
|
|
|
|
|
|
|
|
|
|
Add interest expense on convertible
notes |
|
5.0 |
|
4.9 |
|
10.0 |
|
9.7 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income attributable to
Unisys Corporation for diluted earnings per share |
|
$
64.0 |
|
$
28.8 |
|
$
76.8 |
|
$
43.3 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares
(thousands) |
|
51,782 |
|
50,986 |
|
51,600 |
|
50,867 |
|
|
|
|
|
|
|
|
|
|
Plus incremental shares from assumed
conversion: |
|
|
|
|
|
|
|
|
Employee stock plans |
|
328 |
|
412 |
|
422 |
|
370 |
|
Convertible notes |
|
21,868 |
|
21,868 |
|
21,868 |
|
21,868 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted weighted average
shares |
|
73,978 |
|
73,266 |
|
73,890 |
|
73,105 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basis |
|
|
|
|
|
|
|
|
GAAP net income attributable to Unisys
Corporation for diluted earnings per share |
|
$
31.2 |
|
$
3.8 |
|
$
6.8 |
|
$
54.1 |
|
|
|
|
|
|
|
|
|
|
Divided by adjusted weighted average
shares |
|
73,978 |
|
51,398 |
|
52,022 |
|
73,105 |
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per
share |
|
$
0.42 |
|
$
0.07 |
|
$
0.13 |
|
$
0.74 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP basis |
|
|
|
|
|
|
|
|
Non-GAAP net income attributable to
Unisys Corporation for diluted earnings per share |
|
$
64.0 |
|
$
28.8 |
|
$
76.8 |
|
$
43.3 |
|
|
|
|
|
|
|
|
|
|
Divided by Non-GAAP adjusted weighted
average shares |
|
73,978 |
|
73,266 |
|
73,890 |
|
73,105 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted earnings per
share |
|
$
0.87 |
|
$
0.39 |
|
$
1.04 |
|
$
0.59 |
UNISYS
CORPORATION |
RECONCILIATIONS OF
GAAP TO NON-GAAP |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
|
|
|
|
FREE CASH
FLOW |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Cash provided by (used for)
operations |
|
$
50.9 |
|
$
(11.7) |
|
$
(19.5) |
|
$
(61.9) |
Additions to marketable software |
|
(19.2) |
|
(22.1) |
|
(37.2) |
|
(41.1) |
Additions to properties |
|
(10.1) |
|
(4.8) |
|
(20.8) |
|
(9.9) |
Additions to outsourcing assets |
|
(10.3) |
|
(18.0) |
|
(39.7) |
|
(42.4) |
Free cash flow |
|
11.3 |
|
(56.6) |
|
(117.2) |
|
(155.3) |
Postretirement funding |
|
24.6 |
|
42.0 |
|
47.7 |
|
72.9 |
Cost reduction and other payments, net
of reimbursements |
|
12.4 |
|
10.0 |
|
21.9 |
|
27.0 |
Adjusted free cash flow |
|
$
48.3 |
|
$
(4.6) |
|
$
(47.6) |
|
$
(55.4) |
UNISYS
CORPORATION |
RECONCILIATIONS OF
GAAP TO NON-GAAP |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net income attributable to Unisys
Corporation common shareholders |
|
$
26.2 |
|
$
3.8 |
|
$
6.8 |
|
$
44.4 |
Net income attributable to
noncontrolling interests |
|
3.6 |
|
2.2 |
|
6.2 |
|
3.3 |
Interest expense, net of interest
income of $2.9, $3.1, $5.8, $6.3 respectively* |
|
13.3 |
|
12.6 |
|
25.9 |
|
26.0 |
Provision for income taxes |
|
12.1 |
|
14.3 |
|
25.9 |
|
35.2 |
Depreciation |
|
24.5 |
|
26.2 |
|
49.5 |
|
53.5 |
Amortization |
|
12.1 |
|
13.9 |
|
21.6 |
|
28.6 |
EBITDA |
|
$
91.8 |
|
$
73.0 |
|
$ 135.9 |
|
$ 191.0 |
|
|
|
|
|
|
|
|
|
Topic 606 adjustment |
|
$
- |
|
$
- |
|
$
- |
|
$ (53.0) |
Postretirement expense |
|
23.6 |
|
19.2 |
|
47.1 |
|
38.5 |
Cost reduction and other
expense** |
|
7.0 |
|
0.7 |
|
9.5 |
|
(2.2) |
Non-cash share based expense |
|
2.6 |
|
3.3 |
|
7.3 |
|
7.3 |
Other (income) expense
adjustment*** |
|
3.5 |
|
2.8 |
|
11.1 |
|
10.3 |
Adjusted EBITDA |
|
$ 128.5 |
|
$
99.0 |
|
$ 210.9 |
|
$ 191.9 |
|
|
|
|
|
|
|
|
|
|
*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 |
|
Six Months
Ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenue |
|
|
$ 753.8 |
|
$ 667.4 |
|
$ 1,449.6 |
|
$ 1,375.8 |
Non-GAAP revenue |
|
|
$ 747.3 |
|
$ 667.4 |
|
$ 1,441.1 |
|
$ 1,322.8 |
Net income as a percentage of
revenue |
|
3.5 % |
|
0.6 % |
|
0.5 % |
|
3.2 % |
Adjusted EBITDA as a percentage of
Non-GAAP revenue |
|
17.2 % |
|
14.8 % |
|
14.6 % |
|
14.5 % |
UNISYS
CORPORATION |
RECONCILIATIONS OF
SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING |
(Unaudited) |
(Millions) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
Services Segment |
|
June 30, |
|
June 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
GAAP total revenue |
|
$
653.4 |
|
$
586.7 |
|
$ 1,265.5 |
|
$ 1,155.2 |
Restructuring reimbursement |
|
(6.5) |
|
- |
|
(8.5) |
|
- |
Non-GAAP revenue |
|
$ 646.9 |
|
$ 586.7 |
|
$ 1,257.0 |
|
$ 1,155.2 |
|
|
|
|
|
|
|
|
|
GAAP gross margin |
|
$
116.0 |
|
$
96.7 |
|
$
210.5 |
|
$
190.8 |
Restructuring reimbursement |
|
(6.5) |
|
- |
|
(8.5) |
|
- |
Non-GAAP gross margin |
|
$ 109.5 |
|
$
96.7 |
|
$ 202.0 |
|
$ 190.8 |
|
|
|
|
|
|
|
|
|
GAAP operating profit |
|
$
39.2 |
|
$
18.6 |
|
$
54.4 |
|
$
35.7 |
Restructuring reimbursement |
|
(6.5) |
|
- |
|
(8.5) |
|
- |
Non-GAAP operating profit |
|
$
32.7 |
|
$
18.6 |
|
$
45.9 |
|
$
35.7 |
|
|
|
|
|
|
|
|
|
GAAP gross margin % |
|
17.8% |
|
16.5% |
|
16.6% |
|
16.5% |
Non-GAAP gross margin % |
|
16.9% |
|
16.5% |
|
16.1% |
|
16.5% |
GAAP operating profit % |
|
6.0% |
|
3.2% |
|
4.3% |
|
3.1% |
Non-GAAP operating profit % |
|
5.1% |
|
3.2% |
|
3.7% |
|
3.1% |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
Technology Segment |
|
June 30, |
|
June 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
GAAP total revenue |
|
$
102.5 |
|
$
84.7 |
|
$
188.6 |
|
$
234.6 |
Topic 606 adjustment |
|
- |
|
- |
|
- |
|
(53.0) |
Non-GAAP revenue |
|
$ 102.5 |
|
$
84.7 |
|
$ 188.6 |
|
$ 181.6 |
|
|
|
|
|
|
|
|
|
GAAP gross margin |
|
$
75.3 |
|
$
56.8 |
|
$
125.3 |
|
$
160.1 |
Topic 606 adjustment |
|
- |
|
- |
|
- |
|
(53.0) |
Non-GAAP gross margin |
|
$
75.3 |
|
$
56.8 |
|
$ 125.3 |
|
$ 107.1 |
|
|
|
|
|
|
|
|
|
GAAP operating profit |
|
$
55.1 |
|
$
38.2 |
|
$
84.5 |
|
$
120.2 |
Topic 606 adjustment |
|
- |
|
- |
|
- |
|
(53.0) |
Non-GAAP operating profit |
|
$
55.1 |
|
$
38.2 |
|
$
84.5 |
|
$
67.2 |
|
|
|
|
|
|
|
|
|
GAAP gross margin % |
|
73.5% |
|
67.1% |
|
66.4% |
|
68.2% |
Non-GAAP gross margin % |
|
73.5% |
|
67.1% |
|
66.4% |
|
59.0% |
GAAP operating profit % |
|
53.8% |
|
45.1% |
|
44.8% |
|
51.2% |
Non-GAAP operating profit % |
|
53.8% |
|
45.1% |
|
44.8% |
|
37.0% |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
Total Unisys |
|
June 30, |
|
June 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
GAAP total revenue |
|
$
753.8 |
|
$
667.4 |
|
$ 1,449.6 |
|
$ 1,375.8 |
Topic 606 adjustment |
|
- |
|
- |
|
- |
|
(53.0) |
Restructuring reimbursement |
|
(6.5) |
|
- |
|
(8.5) |
|
- |
Non-GAAP revenue |
|
$ 747.3 |
|
$ 667.4 |
|
$ 1,441.1 |
|
$ 1,322.8 |
|
|
|
|
|
|
|
|
|
GAAP gross margin |
|
$
193.9 |
|
$
152.9 |
|
$
343.8 |
|
$
354.1 |
Topic 606 adjustment |
|
- |
|
- |
|
- |
|
(53.0) |
Restructuring reimbursement |
|
(6.5) |
|
- |
|
(8.5) |
|
- |
Cost reduction expense |
|
(1.0) |
|
(0.5) |
|
(4.7) |
|
(3.5) |
Non-GAAP gross margin |
|
$ 186.4 |
|
$ 152.4 |
|
$ 330.6 |
|
$ 297.6 |
|
|
|
|
|
|
|
|
|
GAAP operating profit |
|
$
87.0 |
|
$
54.0 |
|
$
129.9 |
|
$
155.8 |
Topic 606 adjustment |
|
- |
|
- |
|
- |
|
(53.0) |
Restructuring reimbursement |
|
(6.5) |
|
- |
|
(8.5) |
|
- |
Postretirement expense |
|
0.8 |
|
0.9 |
|
1.6 |
|
1.9 |
Cost reduction and other expense |
|
8.0 |
|
0.7 |
|
10.6 |
|
(2.2) |
Non-GAAP operating profit |
|
$
89.3 |
|
$
55.6 |
|
$ 133.6 |
|
$ 102.5 |
|
|
|
|
|
|
|
|
|
GAAP gross margin % |
|
25.7% |
|
22.9% |
|
23.7% |
|
25.7% |
Non-GAAP gross margin % |
|
24.9% |
|
22.8% |
|
22.9% |
|
22.5% |
GAAP operating profit % |
|
11.5% |
|
8.1% |
|
9.0% |
|
11.3% |
Non-GAAP operating profit % |
|
12.0% |
|
8.3% |
|
9.3% |
|
7.7% |
CONTACT: Investors: Courtney
Holben, Unisys, 215-986-3379, courtney.holben@unisys.com,
Media: John Clendening, Unisys,
214-403-1981, john.clendening@unisys.com