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REG-Unisys Corp: 3rd Quarter Results <Origin Href="QuoteRef">UIS.N</Origin>

 


Unisys Announces Third-Quarter 2016 Financial Results, Reaffirms Full-Year
Guidance


BLUE BELL, Pennsylvania, Oct. 25, 2016 --

3Q 2016:
* Operating cash flow increase of $87 million year over year to $43 million;
free cash flow((1)) increase of $106 million to $6 million
* Total Contract Value (TCV)((2)) signed increase of 22 percent on a
year-to-date basis versus the comparable period last year, including more than
$1.1 billion of TCV signings in the third quarter. Services backlog of $4.1
billion, up 6.7 percent versus the prior quarter
* Operating profit margin of (1.4) percent, relative to operating profit
margin of 1.2 percent in 3Q 2015; non-GAAP operating profit margin((3)) of 6.7
percent, relative to 7.2 percent in 3Q 2015
* Revenue of $683 million, down 7.6 percent, or 5.9 percent on a
constant-currency basis((4)), year over year
* Unisys reaffirms full-year guidance for total company revenue, non-GAAP
operating profit margin and adjusted free cash flow
Unisys Corporation (NYSE: UIS) today reported third-quarter 2016 results
highlighted by strong cash flow growth. Additionally, the company saw strong
contract signings, with Total Contract Value (TCV) signings up 22 percent on a
year-to-date basis versus the comparable period last year, including more than
$1.1 billion in TCV signings in the quarter. Services backlog of $4.1 billion
as of the end of the third quarter was up 6.7 percent sequentially.

"Our year-to-date results show progress toward achieving our goals for 2016
with respect to improving operating profit margin and cash flow generation.
Revenues also continue to track in line with our full-year guidance for 2016,"
said Unisys President and CEO Peter Altabef. "We continue to execute on the
strategy we began in 2015, and we are beginning to see traction with our
vertical go-to-market approach, in addition to bringing a pervasive security
focus to all of our offerings."

Summary of Third-Quarter 2016 Business Results
Company:
* Operating cash flow increased by $87 million versus the prior year to $43
million. The company generated free cash flow of $6 million for the third
quarter, an improvement of $106 million year-over-year. Adjusted free cash
flow((5)) in the third quarter increased $105 million from the prior year.
This represented the fourth consecutive quarter of positive operating cash
flow and adjusted free cash flow.
* The company saw strong contract signings in the third quarter, with TCV
signed up 22 percent on a year-to-date basis, including more than $1.1 billion
of TCV signings in the quarter. Services backlog ended the third quarter at
$4.1 billion, up 6.7 percent sequentially.
* Operating profit margin of (1.4) percent includes cost-reduction and other
charges and pension expense. Third-quarter 2016 non-GAAP operating profit
margin was 6.7 percent, down slightly versus the third quarter 2015. On a
year-to-date basis, however, operating profit margin was 0.6 percent,
representing a 380 basis point increase over the corresponding year-to-date
period for 2015, reflective of the company's ongoing cost-cutting efforts. On
a year-to-date basis, 2016 non-GAAP operating profit margin was 7.0 percent,
an increase of 340 basis points relative to the corresponding year-to-date
period in 2015.
* During the third quarter 2016, the company continued to execute on its
cost-reduction program, largely related to headcount reductions, that are
anticipated to result in $30 million of incremental annualized cost savings,
bringing the total to date to $185 million against a plan of $200 million
exiting 2016, with up to another $30 million anticipated in 2017.
* Revenue of $683 million declined 7.6 percent year over year or 5.9 percent
on a constant-currency basis.
* At September 30, 2016, the company had $443 million in cash.
Services:
* Services revenue, which represented 88 percent of total revenue, declined by
8.4 percent to $601 million, down 6.7 percent in constant currency.
* Services gross margin was down 60 basis points year over year. Nearly
two-thirds of this is attributable to some favorable contracts in 2015 within
the Federal business. Excluding this and ongoing investments in additional
solutions capabilities, the margins for the remaining services business would
have been up year over year. Services operating profit margin was down 220
basis points to 2.6 percent (also due in part to ongoing investments at the
gross margin and SG&A level). Services operating profit margin saw an increase
of 50 basis points sequentially relative to the prior quarter and represented
the strongest quarterly operating margin for Services in 2016.
Technology:
* Technology revenue, which represented 12 percent of total revenue, was
roughly flat year-over-year, at $82 million versus $83 million in the same
quarter last year.
* Technology operating profit margin improved to 32.3 percent from 20.7
percent in the prior year, reflective of the cost-reduction program.
Continued Execution on Business Strategy
The company recently entered into several key contracts in each of its sectors
of focus:
* U.S. Federal Sector: Unisys was selected by U.S. Customs and Border
Protection, part of the Department of Homeland Security, to modernize the
agency's technology for identifying people and vehicles entering and exiting
the U.S.
* Public Sector: Unisys was awarded a contract by the Philippine Statistics
Authority to design and operate phase 2 of its Civil Registry System
modernization project. Under the 12-year contract, which was the largest
contract the company entered into in the third quarter, Unisys will deliver
digital government services to modernize the Civil Registry System and manage
the end-to-end process to originate, authenticate, secure and issue civil
registry documents such as birth certificates to citizens.
* Financial Services Sector: In financial services, Unisys grew its
long-standing relationship with Prudential Plc., a British multinational life
insurance and financial services company headquartered in London. In addition
to Prudential's use of the company's ClearPath Forward technology to support
its core Life & Pensions business applications, Unisys is now also providing a
fast, automated disaster recovery solution to ensure uninterrupted service.
* Commercial Sector: Unisys has entered into a contract with TravelSky, the
leading provider of information technology solutions for China's aviation and
travel industry, to provide expanded processing power for their reservation
and distribution systems that run on the company's ClearPath Forward
technology. This work will build on the momentum of Unisys' recent success
with TravelSky toward migrating their passenger sales and service applications
to the company's AirCore next-generation passenger system.
Conference Call
Unisys will hold a conference call today at 5:30 p.m. Eastern Time to discuss
its results. The listen-only Webcast, as well as the accompanying presentation
materials, can be accessed on the Unisys Investor Web site 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.

Non-GAAP and Other Information
Although appropriate under generally accepted accounting principles (GAAP),
the company's results reflect charges that the company believes are not
indicative of its ongoing operations and that can make its profitability and
liquidity results difficult to compare to prior periods, anticipated future
periods, or to its competitors' results. These items consist of pension 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.

((1)) Free cash flow – The 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 required for reinvestment.

((2)) Total Contract Value – TCV is the estimated total contractual revenue
related to signed contracts.

((3)) Non-GAAP operating profit – Unisys recorded pretax pension expense and
a pretax charge in connection with cost-reduction and other expense. 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.

((4)) 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.

((5)) Adjusted free cash flow – Because inclusion of the company's pension
contributions and cost-reduction 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 and is more indicative of its on-going
operations. This liquidity measure was provided to analysts and investors in
the form of external guidance and is used by management to measure operating
liquidity.

((6)) Non-GAAP diluted earnings per share – Unisys recorded pension expense
and a charge in connection with cost-reduction and other expense. Management
believes that investors may have a better understanding of the company's
performance and return to shareholders by excluding these charges from the
non-GAAP diluted earnings/loss per share calculations. The tax amounts
presented for pension expense and cost-reduction and other expense for the
calculation of non-GAAP diluted earnings per share include the current and
deferred tax expense and benefits recognized under GAAP for pension expense,
cost-reduction and other expense.

((7)) 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 pension 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.

About Unisys 
Unisys is a global information technology company that works with many of the
world's largest companies and government organizations to solve their most
pressing IT and business challenges. Unisys specializes in providing
integrated, leading-edge solutions to clients in the government, financial
services and commercial markets. With more than 20,000 employees serving
clients around the world, Unisys offerings include cloud and infrastructure
services, application services, security solutions, and high-end server
technology. For more information, visit http://www.unisys.com/.

Forward-Looking Statements
Any statements contained in this release that are not historical facts are
forward-looking statements as defined in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include, but are not limited
to, any projections of earnings, revenues, total contract value 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 total contract value
are based, in part, on the assumption that all options of the contracts
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 the
company's ability to effectively anticipate and respond to volatility and
rapid technological innovation in its industry; the company's ability to
improve margins in its services business; the company's ability to sell new
products while maintaining its installed base in its technology business; the
company's ability to access financing markets to refinance its outstanding
debt; the company's ability to realize anticipated cost savings and to
successfully implement its cost reduction initiatives to drive efficiencies
across all of its operations; the company's significant pension obligations
and requirements to make significant cash contributions to its defined benefit
plans; the company's ability to attract, motivate and retain experienced and
knowledgeable personnel in key positions; the risks of doing business
internationally when a significant portion of the company's revenue is derived
from international operations; the potential adverse effects of aggressive
competition in the information services and technology marketplace; the
company's ability to retain significant clients; the company's contracts may
not be as profitable as expected or provide the expected level of revenues;
cybersecurity breaches could result in significant costs and could harm the
company's business and reputation; a significant disruption in the company's
IT systems could adversely affect the company's business and reputation; the
company may face damage to its reputation or legal liability if its clients
are not satisfied with its services or products; the performance and
capabilities of third parties with whom the company has commercial
relationships; the adverse effects of global economic conditions, acts of war,
terrorism or natural disasters; contracts with U.S. governmental agencies may
subject the company to audits, criminal penalties, sanctions and other
expenses and fines; the potential for intellectual property infringement
claims to be asserted against the company or its clients; the possibility that
pending litigation could affect the company's results of operations or cash
flow; the business and financial risk in implementing future dispositions or
acquisitions; 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.: 1025/9461

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               Nine Months Ended        
                                                                          September 30,                   September 30,          
                                                                     2016               2015         2016                2015    
 Revenue                                                                                                                         
 Services                                                            $ 600.9            $ 656.0    $ 1,809.8           $ 1,956.5 
 Technology                                                             82.4               83.2        289.2               268.7 
                                                                       683.3              739.2      2,099.0             2,225.2 
 Costs and expenses                                                                                                              
 Cost of revenue:                                                                                                                
 Services                                                              531.3              564.7      1,594.1             1,714.7 
 Technology                                                             30.4               33.9        106.5               128.6 
                                                                       561.7              598.6      1,700.6             1,843.3 
 Selling, general and administrative                                   120.0              115.4        345.8               389.6 
 Research and development                                               11.4               16.6         40.5                63.2 
                                                                       693.1              730.6      2,086.9             2,296.1 
 Operating profit (loss)                                               (9.8)                8.6         12.1              (70.9) 
 Interest expense                                                        7.7                3.0         19.9                 8.3 
 Other income (expense), net                                             2.3                1.7          3.7                 8.0 
 Income (loss) before income taxes                                    (15.2)                7.3        (4.1)              (71.2) 
 Provision for income taxes                                              9.9               14.9         34.2                33.3 
 Consolidated net income (loss)                                       (25.1)              (7.6)       (38.3)             (104.5) 
 Net income attributable to noncontrolling interests                     3.1                2.0          8.2                 6.5 
 Net income (loss) attributable to Unisys Corporation               $ (28.2)            $ (9.6)     $ (46.5)           $ (111.0) 
 Earnings (loss) per share attributable to Unisys Corporation                                                                    
 Basic                                                              $ (0.56)           $ (0.19)     $ (0.93)            $ (2.22) 
 Diluted                                                            $ (0.56)           $ (0.19)     $ (0.93)            $ (2.22) 
 Shares used in the per share computations (in thousands)                                                                        
 Basic                                                                50,082             49,934       50,052              49,894 
 Diluted                                                              50,082             49,934       50,052              49,894 
                                                                                                                                 

   

                                             UNISYS CORPORATION                                              
                                               SEGMENT RESULTS                                               
                                                 (Unaudited)                                                 
                                                 (Millions)                                                  
                                                                                                             
                                                         Total      Eliminations     Services    Technology  
 Three Months Ended September 30, 2016                                                                       
 Customer revenue                                         $ 683.3                      $ 600.9        $ 82.4 
 Intersegment                                                             $ (5.8)            —           5.8 
 Total revenue                                            $ 683.3         $ (5.8)      $ 600.9        $ 88.2 
 Gross profit percent                                      17.8 %                       16.7 %        59.8 % 
 Operating profit (loss) percent                           (1.4)%                        2.6 %        32.3 % 
 Three Months Ended September 30, 2015                                                                       
 Customer revenue                                         $ 739.2                      $ 656.0        $ 83.2 
 Intersegment                                                            $ (11.9)            —          11.9 
 Total revenue                                            $ 739.2        $ (11.9)      $ 656.0        $ 95.1 
 Gross profit percent                                      19.0 %                       17.3 %        55.0 % 
 Operating profit (loss) percent                            1.2 %                        4.8 %        20.7 % 
                                                                                                             
                                                                                                             
                                                                                                             
                                                         Total      Eliminations     Services    Technology  
 Nine Months Ended September 30, 2016                                                                        
 Customer revenue                                       $ 2,099.0                    $ 1,809.8       $ 289.2 
 Intersegment                                                            $ (17.3)            —          17.3 
 Total revenue                                          $ 2,099.0        $ (17.3)    $ 1,809.8       $ 306.5 
 Gross profit percent                                      19.0 %                       15.9 %        60.2 % 
 Operating profit (loss) percent                            0.6 %                        1.8 %        36.0 % 
 Nine Months Ended September 30, 2015                                                                        
 Customer revenue                                       $ 2,225.2                    $ 1,956.5       $ 268.7 
 Intersegment                                                            $ (40.6)          0.1          40.5 
 Total revenue                                          $ 2,225.2        $ (40.6)    $ 1,956.6       $ 309.2 
 Gross profit percent                                      17.2 %                       15.7 %        49.0 % 
 Operating profit (loss) percent                           (3.2)%                        1.9 %        14.2 % 
                                                                                                             

   

                                     UNISYS CORPORATION                                      
                                 CONSOLIDATED BALANCE SHEETS                                 
                                         (Unaudited)                                         
                                         (Millions)                                          
                                                                                             
                                                 September 30, 2016    December 31, 2015     
 Assets                                                                                      
 Current assets                                                                              
 Cash and cash equivalents                                   $ 442.7              $ 365.2    
 Accounts and notes receivable, net                            532.5                581.6    
 Inventories:                                                                                
 Parts and finished equipment                                   25.3                 20.9    
 Work in process and materials                                  14.2                 22.9    
 Prepaid expenses and other current assets                     119.0                120.9 *  
 Total                                                       1,133.7              1,111.5 *  
 Properties                                                    889.2                876.6    
 Less-Accumulated depreciation and amortization                746.2                722.8    
 Properties, net                                               143.0                153.8    
 Outsourcing assets, net                                       183.0                182.0    
 Marketable software, net                                      137.7                138.5    
 Prepaid postretirement assets                                  79.3                 45.1    
 Deferred income taxes                                         117.5                127.4 *  
 Goodwill                                                      180.1                177.4    
 Other long-term assets                                        201.8                194.3 *  
 Total                                                     $ 2,176.1            $ 2,130.0 *  
 Liabilities and deficit                                                                     
 Current liabilities                                                                         
 Notes payable                                                   $ —               $ 65.8    
 Current maturities of long-term-debt                          220.4                 11.0    
 Accounts payable                                              175.5                219.3    
 Deferred revenue                                              318.9                335.1    
 Other accrued liabilities                                     353.1                329.9 *  
 Total                                                       1,067.9                961.1 *  
 Long-term debt                                                201.2                233.7 *  
 Long-term postretirement liabilities                        1,943.9              2,111.3    
 Long-term deferred revenue                                    142.2                123.3    
 Other long-term liabilities                                    79.0                 79.2 *  
 Commitments and contingencies                                                               
 Total deficit                                             (1,258.1)            (1,378.6)    
 Total                                                     $ 2,176.1            $ 2,130.0 *  
                                                                                             
 * Certain amounts have been reclassified to conform to the current-year presentation.       
                                                                                             

   

                                                                  UNISYS CORPORATION                                                                  
                                                        CONSOLIDATED STATEMENTS OF CASH FLOWS                                                         
                                                                     (Unaudited)                                                                      
                                                                      (Millions)                                                                      
                                                                                                                                                      
                                                                                                                             Nine Months Ended        
                                                                                                                               September 30,          
                                                                                                                          2016                2015    
 Cash flows from operating activities                                                                                                                 
 Consolidated net income (loss)                                                                                          $ (38.3)           $ (104.5) 
 Add (deduct) items to reconcile consolidated net loss to net cash provided by (used for) operating activities:                                       
 Foreign currency transaction losses                                                                                          0.4                 8.0 
 Non-cash interest expense                                                                                                    4.9                   — 
 Employee stock compensation                                                                                                  7.7                 7.9 
 Depreciation and amortization of properties                                                                                 28.6                34.1 
 Depreciation and amortization of outsourcing assets                                                                         39.7                41.2 
 Amortization of marketable software                                                                                         48.0                50.3 
 Other non-cash operating activities                                                                                          1.4                 1.8 
 Loss on disposal of capital assets                                                                                           2.0                 6.1 
 Pension contributions                                                                                                    (104.0)             (115.6) 
 Pension expense                                                                                                             63.0                81.5 
 Increase in deferred income taxes, net                                                                                     (2.7)               (2.8) 
 Decrease in receivables, net                                                                                                59.9                11.7 
 Decrease (increase) in inventories                                                                                           5.5               (7.7) 
 Decrease in accounts payable and other accrued liabilities                                                                (45.3)             (121.4) 
 Increase (decrease) in other liabilities                                                                                    10.5               (8.3) 
 Decrease in other assets                                                                                                    20.0                 9.2 
 Net cash provided by (used for) operating activities                                                                       101.3             (108.5) 
 Cash flows from investing activities                                                                                                                 
 Proceeds from investments                                                                                                3,307.3             2,904.0 
 Purchases of investments                                                                                               (3,331.6)           (2,884.2) 
 Investment in marketable software                                                                                         (47.1)              (46.8) 
 Capital additions of properties                                                                                           (18.3)              (40.2) 
 Capital additions of outsourcing assets                                                                                   (41.4)              (80.4) 
 Other                                                                                                                      (1.3)                 6.1 
 Net cash used for investing activities                                                                                   (132.4)             (141.5) 
 Cash flows from financing activities                                                                                                                 
 Proceeds from issuance of long-term debt                                                                                   213.5                31.8 
 Payments for capped call transactions                                                                                     (27.3)                   — 
 Issuance costs relating to long-term debt                                                                                  (7.3)                   — 
 Payments of long-term debt                                                                                                 (2.1)               (1.3) 
 Proceeds from exercise of stock options                                                                                        —                 3.7 
 Net (payments) proceeds from short-term borrowings                                                                        (65.8)                55.0 
 Financing fees                                                                                                                 —               (0.2) 
 Net cash provided by financing activities                                                                                  111.0                89.0 
 Effect of exchange rate changes on cash and cash equivalents                                                               (2.4)              (40.2) 
 Increase (decrease) in cash and cash equivalents                                                                            77.5             (201.2) 
 Cash and cash equivalents, beginning of period                                                                             365.2               494.3 
 Cash and cash equivalents, end of period                                                                                 $ 442.7             $ 293.1 
                                                                                                                                                      

   

                                                                          UNISYS CORPORATION                                                                          
                                                    RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES                                                     
                                                                             (Unaudited)                                                                              
                                                                  (Millions, except per share data)                                                                   
                                                                                                                                                                      
                                                                                                                 Three Months                    Nine Months          
                                                                                                              Ended September 30             Ended September 30       
                                                                                                           2016               2015        2016                2015    
 GAAP net income (loss) attributable to Unisys                                                            $ (28.2)            $ (9.6)    $ (46.5)           $ (111.0) 
 Corporation common shareholders                                                                                                                                      
                                                                                                                                                                      
 Cost reduction and other expense:                   pretax                                                   34.6               17.4        71.7                70.0 
                                                     tax provision (benefit)                                 (2.6)              (1.0)       (4.7)               (5.0) 
                                                     net of tax                                               32.0               16.4        67.0                65.0 
                                                                                                                                                                      
 Pension Expense:                                    pretax                                                   21.2               27.2        63.0                81.5 
                                                     tax provision (benefit)                                   0.3              (0.6)         0.9               (1.6) 
                                                     net of tax                                               21.5               26.6        63.9                79.9 
                                                                                                                                                                      
 Non-GAAP net income (loss) attributable to Unisys                                                            25.3               33.4        84.4                33.9 
 Corporation common shareholders                                                                                                                                      
                                                                                                                                                                      
 Add interest expense on convertible notes                                                                     4.6                  —         9.9                   — 
                                                                                                                                                                      
 Non-GAAP net income (loss) attributable to Unisys                                                          $ 29.9             $ 33.4      $ 94.3              $ 33.9 
 Corporation for diluted earnings per share                                                                                                                           
                                                                                                                                                                      
 Weighted average shares (thousands)                                                                        50,082             49,934      50,052              49,894 
                                                                                                                                                                      
 Plus incremental shares from assumed conversion:                                                                                                                     
                                                     Employee stock plans                                      226                114         175                 163 
                                                     Convertible notes                                      21,868                  —      15,685                   — 
                                                                                                                                                                      
 Non-GAAP adjusted weighted average shares                                                                  72,176             50,048      65,912              50,057 
                                                                                                                                                                      
 Diluted earnings (loss) per share                                                                                                                                    
                                                                                                                                                                      
 GAAP basis                                                                                                                                                           
 GAAP net income (loss) attributable to Unisys Corporation for diluted earnings per share                 $ (28.2)            $ (9.6)    $ (46.5)           $ (111.0) 
                                                                                                                                                                      
 Divided by adjusted weighted average shares                                                                50,082             49,934      50,052              49,894 
                                                                                                                                                                      
 GAAP diluted earnings (loss) per share                                                                   $ (0.56)           $ (0.19)    $ (0.93)            $ (2.22) 
                                                                                                                                                                      
 Non-GAAP basis                                                                                                                                                       
 Non-GAAP net income (loss) attributable to Unisys Corporation for diluted earnings per share               $ 29.9             $ 33.4      $ 94.3              $ 33.9 
                                                                                                                                                                      
 Divided by Non-GAAP adjusted weighted average shares                                                       72,176             50,048      65,912              50,057 
                                                                                                                                                                      
 Non-GAAP diluted earnings (loss) per share                                                                 $ 0.41             $ 0.67      $ 1.43              $ 0.68 
                                                                                                                                                                      

   

                                          UNISYS CORPORATION                                           
                 RECONCILIATION OF GAAP OPERATING PROFIT TO NON-GAAP OPERATING PROFIT                  
                                              (Unaudited)                                              
                                              (Millions)                                               
                                                                                                       
                                                  Three Months                   Nine Months           
                                               Ended September 30             Ended September 30       
                                             2016              2015        2016                2015    
 GAAP operating profit (loss)               $ (9.8)             $ 8.6       $ 12.1            $ (70.9) 
                                                                                                       
 Cost reduction and other expense              34.6              17.4         71.7                70.0 
                                                                                                       
 FAS87 pension expense                         21.2              27.2         63.0                81.5 
                                                                                                       
 Non-GAAP operating profit (loss)            $ 46.0            $ 53.2      $ 146.8              $ 80.6 
                                                                                                       
 Customer Revenue                           $ 683.3           $ 739.2    $ 2,099.0           $ 2,225.2 
 GAAP operating profit (loss) %              (1.4)%             1.2 %        0.6 %              (3.2)% 
 Non-GAAP operating profit (loss) %           6.7 %             7.2 %        7.0 %               3.6 % 
                                                                                                       

   

                                           UNISYS CORPORATION                                            
                                   RECONCILIATION OF GAAP TO NON-GAAP                                    
                                               (Unaudited)                                               
                                               (Millions)                                                
                                                                                                         
                                             FREE CASH FLOW                                              
                                                                                                         
                                                     Three Months                   Nine Months          
                                                  Ended September 30             Ended September 30      
                                                2016              2015        2016               2015    
 Cash provided by (used for) operations         $ 42.5           $ (44.1)    $ 101.3           $ (108.5) 
 Additions to marketable software               (16.9)             (13.4)     (47.1)              (46.8) 
 Additions to properties                         (7.3)             (15.5)     (18.3)              (40.2) 
 Additions to outsourcing assets                (12.6)             (27.7)     (41.4)              (80.4) 
 Free cash flow                                    5.7            (100.7)      (5.5)             (275.9) 
 Pension funding                                  39.9               39.9      104.0               115.6 
 Cost reduction payments                          23.1               24.4       62.3                37.6 
 Adjusted free cash flow                        $ 68.7           $ (36.4)    $ 160.8           $ (122.7) 
                                                                                                         

   

                                                                 UNISYS CORPORATION                                                                 
                                                         RECONCILIATION OF GAAP TO NON-GAAP                                                         
                                                                    (Unaudited)                                                                     
                                                                     (Millions)                                                                     
                                                                                                                                                    
                                                                       EBITDA                                                                       
                                                                                                                                                    
                                                                                               Three Months                    Nine Months          
                                                                                            Ended September 30             Ended September 30       
                                                                                          2016               2015       2016                2015    
 Net income (loss) attributable to Unisys                                                $ (28.2)           $ (9.6)    $ (46.5)           $ (111.0) 
 Corporation common shareholders                                                                                                                    
 Net income attributable to noncontrolling interests                                          3.1               2.0         8.2                 6.5 
 Interest expense, net of interest income of $2.9, $3, $8.5, $6.7 respectively*               4.8                 —        11.4                 1.6 
 Provision for income taxes                                                                   9.9              14.9        34.2                33.3 
 Depreciation                                                                                23.3              26.5        68.3                75.3 
 Amortization                                                                                15.6              17.4        48.0                50.3 
 EBITDA                                                                                    $ 28.5            $ 51.2     $ 123.6              $ 56.0 
                                                                                                                                                    
 Pension Expense                                                                             21.2              27.2        63.0                81.5 
 Cost reduction and other expense                                                            34.6              17.4        71.7                70.0 
 Non-cash share based expense                                                                 2.4               1.7         7.7                 7.9 
 Other (income) expense adjustment**                                                          0.6               1.3         4.8               (1.3) 
 Adjusted EBITDA                                                                           $ 87.3            $ 98.8     $ 270.8             $ 214.1 
                                                                                                                                                    
 * Included in Other (income) expense, net on the Consolidated Statements of Income                                                                 
 ** Other (income) expense, net as reported on the Consolidated Statements of Income less Interest income                                           
                                                                                                                                                    

 SOURCE: Unisys Corporation

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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