REG-Unisys Corp: 1st Quarter Results
29/04/2020 07:05
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
*
Net Leverage((10)) reduced from 4.3x as of December 31, 2019 to 2.7x as of
March 31, 2020
*
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
*
Non-GAAP operating profit((3)) margin up 70 basis points year over year to
5.5%, relative to 4.8% in prior-year period
*
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
*
Non-GAAP diluted earnings per share((7)) from continuing operations of $0.01
versus a loss of $0.11 in prior-year period
*
Company withdraws guidance in light of the current COVID-19 pandemic
Unisys Corporation
(https://c212.net/c/link/?t=0&l=en&o=2788904-1&h=44081390&u=http%3A%2F%2Fwww.unisys.com%2F&a=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 Services Technology Operating Net Income Adj. EBITDA Diluted EPS
Growth Revenue Revenue Profit Margin Margin
Growth Growth Margin
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 0.7 (5.5)
Corporation
Add interest expense on convertible notes - -
Non-GAAP net income (loss) attributable to Unisys Corporation for diluted $ 0.7 $ (5.5)
earnings per share
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 $ (53.2) $ (32.7)
Corporation
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
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