REG-Unisys Corp: Final Results
23/02/2021 07:05
Unisys Announces 4Q and FY20 Results
BLUE BELL, Pa., Feb. 22, 2021 --
FY20 Revenue and Non-GAAP Operating Profit Margin Exceed Stated Company
Expectations; FY20 Adjusted Free Cash Flow Grows Significantly; Strong Cash
Balance and Significant Reduction in Pension Obligations
* 4Q20 revenue up 5.5% YoY and 16.5% sequentially to $576.9 million
* 4Q20 operating profit margin up 640 bps YoY and 270 bps sequentially to 8.3%
* 4Q20 Non-GAAP operating profit((5)) margin up 790 bps YoY and 550 bps
sequentially
* FY 2020 operating profit margin of 4.3%, versus 6.2% in 2019; non-GAAP
operating profit margin of 7.5%, up 30 bps YoY and above stated company
expectations
* FY 2020 ending cash balance of $898.5 million versus $538.8 million in
prior-year period; pension deficit reduction of ~$710 million versus YE 2019
* Total Contract Value((3)) ("TCV") up 22% YoY in 4Q20 and up 8% YoY for FY
2020
Unisys Corporation
(https://c212.net/c/link/?t=0&l=en&o=3074665-1&h=255946365&u=http%3A%2F%2Fwww.unisys.com%2F&a=Unisys+Corporation) (NYSE:
UIS) today reported fourth-quarter and full-year 2020 financial results. "We
exited 2020 in a strong position, with significant improvements to capital
structure and liquidity and full-year revenue and non-GAAP operating profit
margin that exceeded our expectations," said Unisys Chairman and CEO Peter A.
Altabef. "We transitioned to our new business unit structure at the start of
2021, with a focus on higher-growth and higher-margin markets and solutions,
which we believe will better position the company to drive revenue and margin
improvement over the coming years."
Fourth-Quarter and Full-Year 2020 Highlights
4Q20 YoY Revenue Growth 4Q20 Profitability
Revenue Services Technology Operating Net EBITDA Diluted EPS
Growth Revenue Revenue Profit Income Margin
Growth Growth Margin Margin
GAAP 5.5% (3.0%) 50.1% GAAP 8.3% (30.3%) (18.9%) ($2.77)
Constant-Currency (GAAP) 4.7% (3.5%) 47.6% YoY Change 640 bps (2,460 bps) (2,230 bps) (454.0%)
Non-GAAP 5.9% (2.6%) N/A Non-GAAP 14.0% 8.5% 21.5% $0.73
YoY Change 790 bps 530 bps 770 bps 170%
FY20 YoY Revenue Growth FY20 Profitability
Revenue Services Technology Operating Net EBITDA Diluted EPS
Growth Revenue Revenue Profit Income Margin
Growth Growth Margin Margin
GAAP (8.8%) (10.6%) 1.0% GAAP 4.3% (15.7%) (4.4%) ($5.05)
Constant-Currency (GAAP) (7.7%) (9.4%) 2.2% YoY Change (190) bps (1,160 bps) (1,060 bps) (206.1%)
Non-GAAP (8.2%) (9.8%) N/A Non-GAAP 7.5% 3.7% 15.8% $1.12
YoY Change 30 bps 90 bps 140 bps 6.7%
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 amounts have been
reclassified to reflect the company's U.S. Federal business as discontinued
operations. Throughout this release we only refer to the company's continuing
operations.
Summary of Fourth-Quarter 2020 Business Results
Company:
Fourth-quarter revenue was up 5.5% year over year (4.7% on a
constant-currency((1)) basis) to $576.9 million, versus $546.8 million in the
prior-year period, and was up 16.5% sequentially. Non-GAAP adjusted
revenue((4)) was up 5.9% year over year to $576.9 million, relative to $544.6
million in the prior-year period, and was up 16.5% sequentially. These results
reflect ongoing improvement and stabilization in COVID-disrupted portions of
the business such as Field Services, BPO and Travel & Transportation, along
with stronger ClearPath Forward(®) renewal volumes than expected.
Fourth-quarter TCV was up 22% year over year.
Fourth-quarter operating profit was up over 300% year over year to $47.7
million, versus $10.3 million in the prior-year period, and was up 72.2%
sequentially. Operating profit margin was up 640 bps year over year to 8.3%
and was up 270 bps sequentially. Total company non-GAAP operating profit
margin was up 790 basis points year over year to 14.0% and was up 550 bps
sequentially.
The company recognized $223.9 million of after-tax non-GAAP charges in the
fourth quarter 2020, including charges related to post-retirement obligations
($166.0 million) and cost reductions, relative to charges of $48.2 million in
the prior-year period. As a result, net loss from continuing operations was
$174.7 million versus $31.0 million in the prior-year period, and diluted loss
per share was $2.77, compared to $0.50 in the prior-year period. Non-GAAP net
income((9)) was up 186% year over year to $49.2 million, versus $17.2 million
in the prior-year period, and was up 42.2% sequentially. Non-GAAP diluted
earnings per share((9)) was up 170% year over year to $0.73, versus $0.27 in
the prior-year period, and was up 43.1% sequentially.
Adjusted EBITDA((8)) was up 65.8% year over year to $124.2 million, versus
$74.9 million in the prior-year period, and was up 67.8% sequentially. Net
income margin was (30.3)%, compared to (5.7)% in the prior-year period, driven
by the charges noted above. Adjusted EBITDA margin was up 770 bps year over
year to 21.5% and was up 660 bps sequentially.
The company made $487.7 million in postretirement contributions during the
fourth quarter of 2020, relative to $27.1 million in the prior-year period.
These contributions reduced the pension deficit and future required cash
contributions, but resulted in cash used in operations of $355.4 million,
versus $125.7 million provided by operations in the prior-year period and free
cash flow((10)) of $(390.4) million, relative to $95.6 million in the
prior-year period. The company received tax credits in the prior-year period
versus having required tax payments in the current period, which resulted in
adjusted free cash flow((11)) of $104.6 million versus $112.0 million in the
prior-year period. Adjusted free cash flow was up $52.2 million sequentially.
At December 31, 2020, the company had $898.5 million in cash and cash
equivalents, versus $538.8 million at year-end 2019.
Services:
Services non-GAAP adjusted revenue was $445.0 million, relative to $456.7
million in the prior-year period, down 2.6% year over year (down 3.0% in
constant-currency), and was up 4.5% sequentially. COVID-disrupted businesses
improved and stabilized relative to the third quarter, though volumes were
still down year over year as were volumes in the company's check-processing
JV, as expected. Services gross profit margin was up 320 bps year over year
to 18.4%. Non-GAAP adjusted Services gross profit margin((6)) was up 360 bps
year over year to 18.4%. Services operating profit margin was up 260 basis
points year over year to 1.6%. Non-GAAP adjusted Services operating
profit((7)) margin was up 310 bps year over year to 1.6%. Services backlog was
$3.4 billion, up 3.0% versus the end of the third quarter.
Technology:
Technology revenue was up 50.1% year over year to $131.9 million (47.6% in
constant currency), relative to $87.9 million in the prior-year period, and
was up 90.6% sequentially. Technology gross profit margin was up 130 bps year
over year to 73.2% and was up 1350 bps sequentially. Technology operating
profit margin was up 460 bps year over year to 54.3% and was up 2120 bps
sequentially. The improvements to revenue and margin were driven by higher
volumes on ClearPath Forward renewals in the period than anticipated.
Summary of Full-Year 2020 Business Results
Company:
2020 revenue was $2.03 billion, versus $2.22 billion in 2019, down 8.8% year
over year (7.7% on a constant-currency((1)) basis), better than the company's
stated expectations for a year-over-year decline of 10%. Non-GAAP adjusted
revenue((4)) was $2.03 billion, relative to $2.21 billion in 2019, down 8.2%
year over year. Year-over-year comparisons reflect the impact of
COVID-disrupted portions of the business such as Field Services, BPO and
Travel & Transportation, as well as anticipated declines in the company's
check-processing JV. Full-year TCV was up 8% year over year.
2020 operating profit was $87.0 million, versus $137.9 million in 2019.
Operating profit margin was 4.3%, versus 6.2% in 2019. The year-over-year
decline in operating profit and margin was driven by $62.2 million of
cost-reduction charges incurred during 2020, versus $11.2 million in 2019.
Total company non-GAAP operating profit margin was up 30 basis points year
over year to 7.5%, above stated company expectations of 5.2% to 6.7%.
The company recognized $392.5 million of after-tax non-GAAP charges in 2020,
including charges related to post-retirement obligations ($237.7
million) and cost reductions, versus $153.4 million in 2019. As a result, net
loss from continuing operations was $317.7 million versus $92.2 million in
2019, and diluted loss per share was $5.05, compared to $1.65 in 2019.
Non-GAAP net income((9)) was $74.8 million, versus $61.2 million in 2019.
Non-GAAP diluted earnings per share((9)) was up 6.7% year over year to $1.12,
versus $1.05 in 2019.
Adjusted EBITDA((8)) was up 0.4% year over year to $319.8 million, relative to
$318.5 million in 2019. Net income margin was (15.7)%, compared to (4.1)% in
2019, driven by the charges noted above. Adjusted EBITDA margin was up 140
basis points year over year to 15.8%, relative to 14.4% in 2019.
During 2020, the company made $832.2 million of pension contributions versus
$109.4 million in 2019. These contributions reduced the pension deficit and
future required cash contributions, but resulted in cash used in operations of
$681.2 million, versus $123.9 million provided by operations in 2019, and free
cash flow((10)) of $(811.3) million, relative to $(35.9) million in 2019.
Adjusted free cash flow((11)) was up 59.6% year over year to $42.6
million.
Services:
Services revenue was $1.69 billion, relative to $1.89 billion in 2019, down
10.6% year over year (9.4% in constant-currency). Services non-GAAP adjusted
revenue was $1.69 billion, relative to $1.88 billion in 2019. As noted above,
the year-over-year declines were due to the COVID-related disruptions during
2020, as well as expected declines in the company's check-processing JV.
Services gross profit margin was up 30 bps year over year to 16.5%. Non-GAAP
adjusted Services gross profit margin((6)) was up 90 bps year over year to
16.4%. Services operating profit margin was 0.7%, versus 1.1% in 2019.
Non-GAAP adjusted Services operating profit((7)) margin was up 50 bps year
over year to 0.7%.
Technology:
Technology revenue was up 1.0% year over year (2.2% in constant currency) to
$333.4 million, relative to $330.1 million in 2019, exceeding the company's
stated expectations as a result of higher volumes on ClearPath Forward
renewals than anticipated. Year-over-year margin comparisons were largely
driven by increased amortization costs, as well as higher third-party hardware
sales in 2020, which come with lower margins. As a result, Technology gross
profit margin was 65.0%, compared to 69.0% in 2019, and Technology operating
profit margin was 40.8%, versus 46.1% in 2019.
Select Fourth-Quarter Contract Signings:
In the fourth quarter, the company entered into several noteworthy contracts:
* Digital Workplace Services: The company signed a contract for digital
workplace services with a global healthcare provider. The contract includes
Unisys InteliServe™, which uses artificial intelligence and robotic process
automation to provide a first-rate user experience for 39,000 employees
globally.
* Cloud & Infrastructure: A U.S. state government awarded Unisys a new-scope
contract to support the state's workforce model that is quickly shifting to a
remote-first strategy. Under the contract, Unisys will provide CloudForte(®)
as the foundation for a virtual infrastructure that will secure sensitive
applications and regulated data by preventing users from printing, copying or
downloading data onto unsecured devices.
* ClearPath Forward: TravelSky, the leading provider of information technology
solutions for China's air travel and tourism industry, has renewed its
contract for Unisys ClearPath Forward technology to process business-critical
transactions including passenger reservations, cargo bookings and load
calculations.
Conference Call
Unisys will hold a conference call tomorrow at 8:00 a.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)) Pipeline – Pipeline represents prospective sale opportunities being
pursued or for which bids have been submitted. There is no assurance that
pipeline will translate into recorded revenue.
((3)) Total Contract Value – TCV is the estimated total contractual revenue
related to contracts signed in the period without regard for cancellation
terms. New business TCV represents TCV attributable to new scope for existing
clients and new logo contracts.
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
extinguishment 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.
((4)) 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.
((5)) Non-GAAP operating profit – The company recorded pretax
post-retirement expense and pretax charges in connection with cost-reduction
activities, debt exchange/extinguishment 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 (4) herein.
((6) ) Non-GAAP adjusted Services gross profit – During 2019 and 2020, the
company included the adjustments discussed in (4) herein.
((7)) Non-GAAP adjusted Services operating profit – During 2019 and 2020,
the company included the adjustments discussed in (4) herein.
((8)) 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/extinguishment, 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 (4) herein.
((9)) Non-GAAP net income and non-GAAP diluted earnings per share – The
company has recorded post-retirement expense and charges in connection with
debt exchange/extinguishment 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 (4) herein.
((10)) 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.
((11)) Adjusted free cash flow – Because inclusion of the company's
post-retirement contributions, discontinued operations 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 IT services company that delivers successful outcomes for
the most demanding businesses and governments. Unisys offerings include
digital workplace services, cloud and infrastructure services and software
operating environments for high-intensity enterprise computing. Unisys
integrates security into all of its solutions. For more information on how
Unisys delivers 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 or expectations 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: uncertainty of the magnitude, duration and
spread of the novel coronavirus ("COVID-19") pandemic and the impact of
COVID-19 and governments' responses to it on the global economy and our
business, growth, reputation, projections, prospects, financial condition,
operations, cash flows and liquidity, our ability to attract, motivate and
retain experienced personnel in key positions; our ability to grow revenue and
expand margin in our Digital Workplace Services and Cloud and Infrastructure
businesses; 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 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; our ability to develop
or acquire the capabilities to enhance the company's solutions; the potential
adverse effects of the concentration of the company's business in the global
commercial sector of the information technology industry; our significant
pension obligations and required cash contributions and the possibility that
we may be required to make additional significant cash contributions to our
defined benefit pension plans; our ability to use our net operating loss
carryforwards and certain other tax attributes may be limited; 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; cybersecurity breaches could
result in significant costs and could harm our business and reputation; the
performance and capabilities of third parties with whom we have commercial
relationships; a failure to meet standards or expectations with respect to the
company's environmental, social and governance practices; our ability to
access financing markets; a reduction in our credit rating; 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; 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 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-K 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.: 0222/9817
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 (LOSS)
(Unaudited)
(Millions, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2020 2019 2020 2019
Revenue
Services $ 445.0 $ 458.9 $ 1,692.9 $ 1,892.7
Technology 131.9 87.9 333.4 330.1
576.9 546.8 2,026.3 2,222.8
Costs and expenses
Cost of revenue:
Services 367.8 405.4 1,429.4 1,590.6
Technology 34.0 25.1 113.9 98.2
401.8 430.5 1,543.3 1,688.8
Selling, general and administrative 116.9 96.8 369.4 364.8
Research and development 10.5 9.2 26.6 31.3
529.2 536.5 1,939.3 2,084.9
Operating income 47.7 10.3 87.0 137.9
Interest expense 8.3 15.2 29.2 62.1
Other (expense), net (195.3) (27.9) (329.6) (136.4)
Loss from continuing operations before income taxes (155.9) (32.8) (271.8) (60.6)
Provision for income taxes 18.8 4.3 45.4 27.7
Consolidated net loss from continuing operations (174.7) (37.1) (317.2) (88.3)
Net income (loss) attributable to noncontrolling interests - (6.1) 0.5 3.9
Net loss from continuing operations attributable to Unisys Corporation (174.7) (31.0) (317.7) (92.2)
Income from discontinued operations, net of tax 1.6 20.2 1,068.4 75.0
Net income (loss) attributable to Unisys Corporation $ (173.1) $ (10.8) $ 750.7 $ (17.2)
Earnings (loss) per share attributable to Unisys Corporation
Basic
Continuing Operations $ (2.77) $ (0.50) $ (5.05) $ (1.65)
Discontinued Operations 0.02 0.33 16.98 1.34
Total $ (2.75) $ (0.17) $ 11.93 $ (0.31)
Diluted
Continuing Operations $ (2.77) $ (0.50) $ (5.05) $ (1.65)
Discontinued Operations 0.02 0.33 16.98 1.34
Total $ (2.75) $ (0.17) $ 11.93 $ (0.31)
UNISYS CORPORATION
SEGMENT RESULTS
(Unaudited)
(Millions)
Total Eliminations Services Technology
Three Months Ended December 31, 2020
Customer revenue $ 576.9 $ - $ 445.0 $ 131.9
Intersegment - (5.4) - 5.4
Total revenue $ 576.9 $ (5.4) $ 445.0 $ 137.3
Gross profit percent 30.4 % 18.4 % 73.2 %
Operating profit percent 8.3 % 1.6 % 54.3 %
Three Months Ended December 31, 2019
Customer revenue $ 546.8 $ - $ 458.9 $ 87.9
Intersegment - (8.4) - 8.4
Total revenue $ 546.8 $ (8.4) $ 458.9 $ 96.3
Gross profit percent 21.3 % 15.2 % 71.9 %
Operating profit percent 1.9 % (1.0)% 49.7 %
Total Eliminations Services Technology
Year Ended December 31, 2020
Customer revenue $ 2,026.3 $ - $ 1,692.9 $ 333.4
Intersegment - (16.3) - 16.3
Total revenue $ 2,026.3 $ (16.3) $ 1,692.9 $ 349.7
Gross profit percent 23.8 % 16.5 % 65.0 %
Operating profit percent 4.3 % 0.7 % 40.8 %
Year Ended December 31, 2019
Customer revenue $ 2,222.8 $ - $ 1,892.7 $ 330.1
Intersegment - (15.2) - 15.2
Total revenue $ 2,222.8 $ (15.2) $ 1,892.7 $ 345.3
Gross profit percent 24.0 % 16.2 % 69.0 %
Operating profit percent 6.2 % 1.1 % 46.1 %
UNISYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Millions)
December 31, December 31,
2020 2019
Assets
Current assets:
Cash and cash equivalents $ 898.5 $ 538.8
Accounts receivable, net 460.5 417.7
Contract assets 44.3 38.4
Inventories 13.4 16.4
Prepaid expenses and other current assets 89.3 100.7
Current assets of discontinued operations - 109.3
Total current assets 1,506.0 1,221.3
Properties 727.0 784.0
Less-accumulated depreciation and amortization 616.5 668.0
Properties, net 110.5 116.0
Outsourcing assets, net 173.9 202.1
Marketable software, net 193.6 186.8
Operating lease right-of-use assets 79.3 71.4
Prepaid postretirement assets 187.5 136.2
Deferred income taxes 136.2 114.0
Goodwill 108.6 110.4
Restricted cash 8.2 13.0
Other long-term assets 204.1 198.9
Long-term assets of discontinued operations - 133.9
Total assets $ 2,707.9 $ 2,504.0
Liabilities and deficit
Current liabilities:
Current maturities of long-term-debt $ 102.8 $ 13.5
Accounts payable 223.2 204.3
Deferred revenue 257.1 246.4
Other accrued liabilities 352.0 316.7
Current liabilities of discontinued operations - 146.4
Total current liabilities 935.1 927.3
Long-term debt 527.1 565.9
Long-term postretirement liabilities 1,286.1 1,960.2
Long-term deferred revenue 137.9 147.0
Long-term operating lease liabilities 62.4 56.0
Other long-term liabilities 71.4 47.6
Long-term liabilities of discontinued operations - 28.3
Commitments and contingencies
Total Unisys Corporation stockholders' deficit (356.8) (1,265.4)
Noncontrolling interests 44.7 37.1
Total deficit (312.1) (1,228.3)
Total liabilities and deficit $ 2,707.9 $ 2,504.0
UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Millions)
Year Ended
December 31,
2020 2019
Cash flows from operating activities
Consolidated net loss from continuing operations $ (317.2) $ (88.3)
Income from discontinued operations, net of tax 1,068.4 75.0
Adjustments to reconcile consolidated net loss to net cash (used for) provided by operating activities:
Gain on sale of U.S. Federal business (1,060.0) -
Foreign currency translation losses 36.2 11.0
Non-cash interest expense 4.6 9.2
Debt extinguishment charge 28.5 20.1
Employee stock compensation 14.5 13.2
Depreciation and amortization of properties 29.7 35.3
Depreciation and amortization of outsourcing assets 65.8 63.8
Amortization of marketable software 65.5 48.3
Other non-cash operating activities (0.3) (1.6)
Loss on disposal of capital assets 4.5 1.5
Postretirement contributions (832.2) (109.4)
Postretirement expense 239.2 96.6
Deferred income taxes, net (13.4) 4.4
Changes in operating assets and liabilities:
Receivables, net and contract assets (74.8) (8.3)
Inventories 3.0 6.1
Other assets 5.9 9.9
Accounts payable and current liabilities 3.4 (114.4)
Other liabilities 47.5 51.5
Net cash (used for) provided by operating activities (681.2) 123.9
Cash flows from investing activities
Net proceeds from sale of U.S. Federal business 1,162.9 -
Proceeds from investments 3,388.5 3,568.9
Purchases of investments (3,379.2) (3,566.1)
Capital additions of properties (27.7) (38.0)
Capital additions of outsourcing assets (30.1) (48.8)
Investments in marketable software (72.3) (73.0)
Net proceeds from sale of properties - (0.3)
Other (0.5) (0.9)
Net cash provided by (used for) investing activities 1,041.6 (158.2)
Cash flows from financing activities
Cash paid in connection with debt extinguishment (23.7) (56.7)
Proceeds from capped call transactions - 7.2
Payments of long-term debt (454.8) (14.4)
Proceeds from issuance of long-term debt 497.3 30.5
Issuance costs relating to long-term debt (7.9) -
Other (5.8) (4.6)
Net cash provided by (used for) financing activities 5.1 (38.0)
Effect of exchange rate changes on cash, cash equivalents and restricted cash (10.6) -
Increase (decrease) in cash, cash equivalents and restricted cash 354.9 (72.3)
Cash, cash equivalents and restricted cash, beginning of year 551.8 624.1
Cash, cash equivalents and restricted cash, end of year $ 906.7 $ 551.8
UNISYS CORPORATION
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited)
(Millions, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2020 2019 2020 2019
GAAP net loss from continuing operations attributable $ (174.7) $ (31.0) $ (317.7) $ (92.2)
to Unisys Corporation
Postretirement expense: pretax 166.4 25.1 239.2 96.6
tax 0.4 0.2 1.5 -
net of tax 166.0 24.9 237.7 96.6
Debt extinguishment, cost reduction and other expenses: pretax 58.6 22.7 156.0 51.4
tax 0.7 - 1.6 1.8
net of tax 57.9 22.7 154.4 49.6
minority interest - 0.6 0.4 7.2
net of minority interest 57.9 23.3 154.8 56.8
Non-GAAP net income from continuing operations attributable 49.2 17.2 74.8 61.2
to Unisys Corporation
Add interest expense on convertible notes - 2.1 - 15.3
Non-GAAP net income attributable to Unisys Corporation for $ 49.2 $ 19.3 $ 74.8 $ 76.5
diluted earnings per share
Weighted average shares (thousands) 63,038 62,397 62,932 55,961
Plus incremental shares from assumed conversion:
Employee stock plans 805 456 580 411
Convertible notes 3,400 8,626 3,400 16,577
Non-GAAP adjusted weighted average shares 67,243 71,479 66,912 72,949
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 $ (174.7) $ (31.0) $ (317.7) $ (92.2)
Divided by weighted average shares 63,038 62,397 62,932 55,961
GAAP diluted loss per share $ (2.77) $ (0.50) $ (5.05) $ (1.65)
Non-GAAP basis
Non-GAAP net income from continuing operations attributable to Unisys Corporation for diluted earnings per share $ 49.2 $ 19.3 $ 74.8 $ 76.5
Divided by Non-GAAP adjusted weighted average shares 67,243 71,479 66,912 72,949
Non-GAAP diluted loss per share $ 0.73 $ 0.27 $ 1.12 $ 1.05
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
FREE CASH FLOW
Three Months Ended Year Ended
December 31, December 31,
2020 2019 2020 2019
Cash (used for) provided by operations $ (355.4) $ 125.7 $ (681.2) $ 123.9
Additions to marketable software (17.5) (16.8) (72.3) (73.0)
Additions to properties (11.0) (8.9) (27.7) (38.0)
Additions to outsourcing assets (6.5) (4.4) (30.1) (48.8)
Free cash flow (390.4) 95.6 (811.3) (35.9)
Postretirement funding 487.7 27.1 832.2 109.4
Discontinued operations 0.7 (27.1) (8.4) (100.3)
Debt extinguishment, cost reduction and other payments, net of reimbursements 6.6 16.4 30.1 53.5
Adjusted free cash flow $ 104.6 $ 112.0 $ 42.6 $ 26.7
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
EBITDA
Three Months Ended Year Ended
December 31, December 31,
2020 2019 2020 2019
Net loss from continuing operations attributable to Unisys $ (174.7) $ (31.0) $ (317.7) $ (92.2)
Corporation
Net income (loss) attributable to noncontrolling interests - (6.1) 0.5 3.9
Interest expense, net of interest income of $1.3, $2.0, $7.3, $10.6 respectively* 7.0 13.2 21.9 51.5
Provision for income taxes 18.8 4.3 45.4 27.7
Depreciation 24.6 25.1 95.5 99.1
Amortization 15.3 13.3 65.5 48.3
EBITDA $ (109.0) $ 18.8 $ (88.9) $ 138.3
Postretirement expense $ 166.4 $ 25.1 $ 239.2 $ 96.6
Debt extinguishment, cost reduction and other expenses** 58.6 22.7 147.8 50.3
Non-cash share based expense 3.4 3.1 14.5 13.2
Other expense, net adjustment*** 4.8 5.2 7.2 20.1
Adjusted EBITDA $ 124.2 $ 74.9 $ 319.8 $ 318.5
*Included in other expense, net on the consolidated statements of income
**Reduced for depreciation and amortization included above
***Other expense, net as reported on the consolidated statements of income less postretirement expense, interest income and items included in debt extinguishment, cost reduction and other expenses
Three Months Ended Year Ended
December 31, December 31,
2020 2019 2020 2019
Revenue $ 576.9 $ 546.8 $ 2,026.3 $ 2,222.8
Non-GAAP revenue 576.9 544.6 2,025.3 2,205.3
Net loss from continuing operations attributable to Unisys Corporation as a percentage of revenue (30.3)% (5.7)% (15.7)% (4.1)%
Non-GAAP net income from continuing operations attributable to Unisys Corporation as a percentage of Non-GAAP revenue 8.5 % 3.2 % 3.7 % 2.8 %
Adjusted EBITDA as a percentage of Non-GAAP revenue 21.5 % 13.8 % 15.8 % 14.4 %
UNISYS CORPORATION
RECONCILIATION OF GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING
(Unaudited)
(Millions)
Three Months Ended Year Ended
Services Segment December 31, December 31,
2020 2019 2020 2019
GAAP total revenue $ 445.0 $ 458.9 $ 1,692.9 $ 1,892.7
Restructuring reimbursement - (2.2) (1.0) (17.5)
Non-GAAP revenue $ 445.0 $ 456.7 $ 1,691.9 $ 1,875.2
GAAP gross margin $ 81.9 $ 69.6 $ 279.3 $ 307.4
Restructuring reimbursement - (2.2) (1.0) (17.5)
Non-GAAP gross margin $ 81.9 $ 67.4 $ 278.3 $ 289.9
GAAP operating profit $ 7.1 $ (4.6) $ 12.2 $ 20.8
Restructuring reimbursement - (2.2) (1.0) (17.5)
Non-GAAP operating profit $ 7.1 $ (6.8) $ 11.2 $ 3.3
GAAP gross margin % 18.4% 15.2% 16.5% 16.2%
Non-GAAP gross margin % 18.4% 14.8% 16.4% 15.5%
GAAP operating profit % 1.6% (1.0%) 0.7% 1.1%
Non-GAAP operating profit % 1.6% (1.5%) 0.7% 0.2%
Three Months Ended Year Ended
Total Unisys December 31, December 31,
2020 2019 2020 2019
GAAP total revenue $ 576.9 $ 546.8 $ 2,026.3 $ 2,222.8
Restructuring reimbursement - (2.2) (1.0) (17.5)
Non-GAAP revenue $ 576.9 $ 544.6 $ 2,025.3 $ 2,205.3
GAAP gross margin $ 175.1 $ 116.3 $ 483.0 $ 534.0
Restructuring reimbursement - (2.2) (1.0) (17.5)
Cost reduction expense 6.5 17.7 22.2 11.0
Non-GAAP gross margin $ 181.6 $ 131.8 $ 504.2 $ 527.5
GAAP operating profit $ 47.7 $ 10.3 $ 87.0 $ 137.9
Restructuring reimbursement - (2.2) (1.0) (17.5)
Postretirement expense 0.8 0.8 3.3 3.3
Cost reduction and other expense 32.4 24.4 63.2 35.2
Non-GAAP operating profit $ 80.9 $ 33.3 $ 152.5 $ 158.9
GAAP gross margin % 30.4% 21.3% 23.8% 24.0%
Non-GAAP gross margin % 31.5% 24.2% 24.9% 23.9%
GAAP operating profit % 8.3% 1.9% 4.3% 6.2%
Non-GAAP operating profit % 14.0% 6.1% 7.5% 7.2%
SOURCE Unisys Corporation
CONTACT: Investors: Courtney Holben, Unisys, 215-986-3379,
courtney.holben@unisys.com; Media: John Clendening, Unisys, 214-403-1981,
john.clendening@unisys.com
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