REG-Unisys Corp: Half-year Report
03/08/2021 07:05
Unisys Announces 2Q21 Results
Double-digit YoY Revenue Growth; Significant YoY Operating Profit Margin and
Cash Flow Improvement; Continued Execution Against Strategic Goals
BLUE BELL, Pa., Aug. 2, 2021 --
* Revenue grew 17.9% YoY, supported by YoY growth in all segments
* Operating profit margin increased 980 bps YoY to 7.9%; non-GAAP operating
profit((5)) margin increased 950 bps YoY to 9.7%, supported by YoY gross
margin improvement in all segments
* Cash from operations improved $56.1M YoY to $41.9M; Free cash
flow((8)) positive, up $68.6M YoY to $19.0M; Adjusted free cash
flow((9)) improved $91.6M YoY to $54.5M
* Expanded and enhanced proactive experience capabilities within Digital
Workplace Solutions with completion of Unify Square acquisition
Unisys Corporation
(https://c212.net/c/link/?t=0&l=en&o=3246603-1&h=2138737257&u=http%3A%2F%2Fwww.unisys.com%2F&a=Unisys+Corporation) (NYSE:
UIS) today reported second-quarter 2021 financial results. "We achieved
double-digit year-over-year revenue growth and significant year-over-year
improvements to profitability and cash flow in the second quarter," said
Unisys Chair and CEO Peter A. Altabef. "We also continued executing on the
strategic goals that we described during our January investor presentation for
sustainable growth and margin expansion, including advancing the
transformation of our Digital Workplace Solutions business, broadening our
cloud capabilities, and expanding our enterprise computing solutions."
The segment formerly referred to as ClearPath Forward(®) (CPF) is now called
Enterprise Computing Solutions (ECS). This reflects a name change only.
Summary of Second-Quarter 2021 Results
* Revenue: * Revenue grew 17.9% YoY to $517.3M vs. $438.8M in 2Q20 (11.5% YoY
growth in constant currency((1))) * Revenue growth was supported by YoY growth
in each of the company's three segments
* Operating Profit: * Operating profit grew $49.3M YoY to $40.8M vs. $(8.5)M
in 2Q20 * Non-GAAP operating profit grew $49.3M YoY to $50.1M vs. $0.8M in
2Q20
* Operating profit margin improved 980 bps YoY to 7.9% vs. (1.9)% in 2Q20 *
Non-GAAP operating profit margin improved 950 bps YoY to 9.7% vs. 0.2% in 2Q20
* YoY operating profit margin increases were supported by YoY improvements in
gross margin for each of the company's three segments
* Adjusted EBITDA and Net Income: * Adjusted EBITDA((6)) increased 124.8% YoY
to $94.4M vs. $42.0M in 2Q20 * Adjusted EBITDA margin improved 860 bps YoY to
18.2% vs. 9.6% in 2Q20
* The company completed its goal of $1.2B in gross pension liability
reductions during the quarter, and recognized settlement charges of $210.7M
($2.37 per diluted share) related to its most recent pension
liability-reduction initiatives * Net loss from continuing operations was
$140.8M vs. a net loss of $76.5M in 2Q20, with the noted settlement charges of
$210.7M exceeding the size of the net loss
* Net income margin of (27.2)% vs. (17.4)% in 2Q20 (980 bps decline)
* Non-GAAP net income from continuing operations((7)) improved $55.7M YoY to
$46.0M vs. $(9.7)M in 2Q20 * Non-GAAP net income margin improved 1110 bps to
8.9% vs. (2.2)% in 2Q20
* Earnings Per Share from Continuing Operations: * As noted above, the company
completed its $1.2B pension liability-reduction goal during the quarter and
recognized related settlement charges * Loss per share from continuing
operations of $2.10 vs. a loss of $1.21 in 2Q20, with the noted settlement
charges of $2.37 per diluted share exceeding the size of the net loss per
share
* Non-GAAP diluted earnings per share from continuing
operations((7)) improved $0.83 to $0.68 vs. $(0.15) in 2Q20
* Cash Flow: * Cash from operations improved $56.1M to $41.9M vs. cash used in
operations of $14.2M in 2Q20, helped by margin improvements
* Free cash flow improved $68.6M to $19.0M vs. $(49.6)M in 2Q20, helped by
capex being lower by 35.3% in 2Q21
* Adjusted free cash flow improved $91.6M to $54.5M vs. $(37.1)M in 2Q20
* Backlog: * Total company backlog((2) ) of $3.3B vs. $3.4B as of 1Q21 *
Sequential decline in backlog due to a delay in signing of one large new DWS
contract, which has since been signed.
Financial Highlights by Segment:
DWS:
* DWS revenue grew 9.7% YoY to $146.5M vs. $133.5M in 2Q20 (4.4% YoY growth in
constant currency) * YoY growth reflects increased revenue from proactive
experience solutions and improvement in businesses that were impacted by
COVID-19
* DWS gross profit grew 144.9% YoY to $22.3M vs. $9.1M in 2Q20 * DWS gross
margin improved 840 bps YoY to 15.2% vs. 6.8% in 2Q20
* During 2Q21, the company signed a contract with a consortium of U.S.-based
energy companies (a new client for Unisys) to provide a full range of IT
solutions including digital workplace, application support and cloud &
infrastructure, all with security oversight and protection. The agreement
highlights the use of Unisys' IP-led solutions, including InteliServe™ and
CloudForte(®), to improve productivity and deliver a superior employee
experience.
C&I:
* C&I revenue grew 9.9% YoY to $124.4M vs. $113.2M in 2Q20 (5.9% YoY growth in
constant currency) * C&I revenue growth supported by 15.7% YoY growth in C&I
revenue in the U.S. & Canada
* C&I gross profit grew 163.2% YoY to $15.6M vs. $5.9M in 2Q20 * C&I gross
margin improved 730 bps YoY to 12.5% vs. 5.2% in 2Q20
* During 2Q21 the company signed a contract that spans both DWS and C&I with
the State of Wisconsin Department of Workforce Development, a new client, to
provide a cloud-based contact center solution that will improve the experience
of how citizens interact with government. Through this new solution, Wisconsin
citizens will be able to contact various government programs more quickly, and
all contacts they have with these programs will be seamlessly linked across
platforms to improve access and ensure better customer service.
ECS:
* ECS revenue grew 40.2% YoY to $169.5M vs. $120.9M in 2Q20 (32.9% YoY growth
in constant currency) * YoY revenue growth was supported by higher license
renewal revenue than anticipated, driven by higher-volumes than expected
* ECS services revenue also grew 2% YoY
* ECS gross profit grew 83.6% YoY to $104.2M vs. $56.8M in 2Q20 * ECS gross
margin improved 1430 bps YoY to 61.3% vs. 47.0% in 2Q20
* During 2Q21, the Company signed a contract expansion with one of the largest
financial services institutions in Brazil for consulting and application
services for their ClearPath Forward and related application environment,
including development and modernization related to the integration of more
than 90 systems to support the institution's mortgage processing operation
across different states, channels and partners in the country. Unisys will
also deploy Stealth™ software to secure multiple state applications.
Conference Call
Unisys will hold a conference call August 3 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) ) Backlog – Represents future revenue associated with contracted work
which has not yet been delivered or performed. Although we believe this
backlog is firm, we may, for commercial reasons, allow the orders to be
cancelled, with or without penalty.
((3) ) 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.
((4)) 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 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 certain
portions of 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.
((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.
((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/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.
((7)) 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.
((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, 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 solutions company that delivers successful outcomes for
the most demanding businesses and governments. Unisys offerings include
digital workplace solutions, cloud and infrastructure solutions, enterprise
computing solutions, business process solutions and cybersecurity solutions.
For more information on how Unisys delivers for its clients across the
commercial, financial services and government 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 Solutions 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-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.: 0802/9843
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 Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Revenue
Services $ 430.5 $ 396.0 $ 850.9 $ 821.9
Technology 86.8 42.8 176.2 132.3
517.3 438.8 1,027.1 954.2
Costs and expenses
Cost of revenue:
Services 337.9 340.0 676.6 715.7
Technology 37.2 23.9 69.1 50.5
375.1 363.9 745.7 766.2
Selling, general and administrative 94.6 80.2 184.6 167.0
Research and development 6.8 3.2 12.4 9.4
476.5 447.3 942.7 942.6
Operating income (loss) 40.8 (8.5) 84.4 11.6
Interest expense 8.4 4.6 18.5 18.5
Other (expense), net (227.8) (53.7) (410.4) (101.8)
Loss from continuing operations before income taxes (195.4) (66.8) (344.5) (108.7)
Provision (benefit) for income taxes (53.1) 9.7 (44.7) 20.5
Consolidated net loss from continuing operations (142.3) (76.5) (299.8) (129.2)
Net income (loss) attributable to noncontrolling interests (1.5) - (1.2) 0.5
Net loss from continuing operations attributable to Unisys Corporation (140.8) (76.5) (298.6) (129.7)
Income (loss) from discontinued operations, net of tax - (2.1) - 1,066.4
Net income (loss) attributable to Unisys Corporation $ (140.8) $ (78.6) $ (298.6) $ 936.7
Earnings (loss) per share attributable to Unisys Corporation
Basic
Continuing Operations $ (2.10) $ (1.21) $ (4.54) $ (2.06)
Disontinued Operations - (0.04) - 16.97
Total $ (2.10) $ (1.25) $ (4.54) $ 14.91
Diluted
Continuing Operations $ (2.10) $ (1.21) $ (4.54) $ (2.06)
Disontinued Operations - (0.04) - 16.97
Total $ (2.10) $ (1.25) $ (4.54) $ 14.91
UNISYS CORPORATION
SEGMENT RESULTS
(Unaudited)
(Millions)
Total DWS C&I ECS Other
Three Months Ended June 30, 2021
Customer revenue $ 517.3 $ 146.5 $ 124.4 $ 169.5 $ 76.9
Intersegment - - - 0.5 (0.5)
Total revenue $ 517.3 $ 146.5 $ 124.4 $ 170.0 $ 76.4
Gross profit percent 27.5 % 15.2 % 12.5 % 61.3 %
Three Months Ended June 30, 2020
Customer revenue $ 438.8 $ 133.5 $ 113.2 $ 120.9 $ 71.2
Intersegment - - - - -
Total revenue $ 438.8 $ 133.5 $ 113.2 $ 120.9 $ 71.2
Gross profit percent 17.1 % 6.8 % 5.2 % 47.0 %
Total DWS C&I ECS Other
Six Months Ended June 30, 2021
Customer revenue $ 1,027.1 $ 287.6 $ 247.7 $ 337.1 $ 154.7
Intersegment - - - 1.4 (1.4)
Total revenue $ 1,027.1 $ 287.6 $ 247.7 $ 338.5 $ 153.3
Gross profit percent 27.4 % 14.2 % 11.1 % 61.2 %
Six Months Ended June 30, 2020
Customer revenue $ 954.2 $ 293.7 $ 217.2 $ 292.6 $ 150.7
Intersegment - - - 0.1 (0.1)
Total revenue $ 954.2 $ 293.7 $ 217.2 $ 292.7 $ 150.6
Gross profit percent 19.7 % 5.5 % 1.4 % 53.6 %
UNISYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Millions)
June 30, December 31,
2021 2020
Assets
Current assets:
Cash and cash equivalents $ 596.7 $ 898.5
Accounts receivable, net 400.7 460.5
Contract assets 47.8 44.3
Inventories 6.1 13.4
Prepaid expenses and other current assets 94.9 89.3
Total current assets 1,146.2 1,506.0
Properties 712.9 727.0
Less-accumulated depreciation and amortization 605.5 616.5
Properties, net 107.4 110.5
Outsourcing assets, net 150.1 173.9
Marketable software, net 188.9 193.6
Operating lease right-of-use assets 67.5 79.3
Prepaid postretirement assets 124.1 187.5
Deferred income taxes 153.5 136.2
Goodwill 226.2 108.6
Intangible assets, net 34.0 -
Restricted cash 9.5 8.2
Other long-term assets 168.9 204.1
Total assets $ 2,376.3 $ 2,707.9
Liabilities and deficit
Current liabilities:
Current maturities of long-term-debt $ 19.4 $ 102.8
Accounts payable 131.0 223.2
Deferred revenue 242.0 257.1
Other accrued liabilities 286.5 352.0
Total current liabilities 678.9 935.1
Long-term debt 517.5 527.1
Long-term postretirement liabilities 1,195.7 1,286.1
Long-term deferred revenue 143.3 137.9
Long-term operating lease liabilities 54.1 62.4
Other long-term liabilities 50.6 71.4
Commitments and contingencies
Total Unisys Corporation stockholders' deficit (308.8) (356.8)
Noncontrolling interests 45.0 44.7
Total deficit (263.8) (312.1)
Total liabilities and deficit $ 2,376.3 $ 2,707.9
UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Millions)
Six Months Ended
June 30,
2021 2020
Cash flows from operating activities
Consolidated net loss from continuing operations $ (299.8) $ (129.2)
Income from discontinued operations, net of tax - 1,066.4
Adjustments to reconcile consolidated net loss to net cash used for operating activities:
Gain on sale of U.S. Federal business - (1,057.4)
Loss on debt extinguishment - 28.5
Foreign currency translation losses 1.2 15.3
Non-cash interest expense 1.2 2.7
Employee stock compensation 7.0 8.0
Depreciation and amortization of properties 15.2 15.6
Depreciation and amortization of outsourcing assets 33.2 32.7
Amortization of marketable software 34.4 36.0
Amortization of intangible assets 0.5 -
Other non-cash operating activities (0.2) 1.3
Loss on disposal of capital assets 1.2 0.5
Postretirement contributions (32.1) (333.0)
Postretirement expense 394.7 48.4
Deferred income taxes, net (65.2) (7.0)
Changes in operating assets and liabilities
Receivables, net and contract assets 96.1 39.6
Inventories 7.4 1.4
Other assets (5.5) (3.0)
Accounts payable and current liabilities (207.2) (161.5)
Other liabilities 16.9 2.6
Net cash used for operating activities (1.0) (392.1)
Cash flows from investing activities
Purchase of business (150.1) -
Net proceeds from sale of U.S. Federal business - 1,159.4
Proceeds from investments 2,261.6 1,735.3
Purchases of investments (2,262.4) (1,755.9)
Investments in marketable software (29.7) (36.7)
Capital additions of properties (12.0) (10.6)
Capital additions of outsourcing assets (8.7) (15.8)
Other (0.4) (0.2)
Net cash (used for) provided by investing activities (201.7) 1,075.5
Cash flows from financing activities
Proceeds from short-term borrowings - 60.3
Proceeds from issuance of long-term debt 1.5 4.0
Payments of long-term debt (95.4) (448.4)
Cash paid for debt extinguishment - (23.7)
Proceeds from exercise of stock options 3.7 -
Other (7.7) (4.7)
Net cash used for financing activities (97.9) (412.5)
Effect of exchange rate changes on cash, cash equivalents and restricted cash 0.1 (30.3)
Increase (decrease) in cash, cash equivalents and restricted cash (300.5) 240.6
Cash, cash equivalents and restricted cash, beginning of period 906.7 551.8
Cash, cash equivalents and restricted cash, end of period $ 606.2 $ 792.4
UNISYS CORPORATION
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited)
(Millions, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
GAAP net loss from continuing operations attributable to Unisys Corporation $ (140.8) $ (76.5) $ (298.6) $ (129.7)
Postretirement expense: pretax 225.7 24.9 394.7 48.4
tax 52.0 0.4 52.4 0.7
net of tax 173.7 24.5 342.3 47.7
Cost reduction and other expenses: pretax 13.6 42.8 32.7 74.6
tax 0.5 0.5 0.6 1.1
net of tax 13.1 42.3 32.1 73.5
noncontrolling interest - - - -
net of noncontrolling interest 13.1 42.3 32.1 73.5
Non-GAAP net income (loss) from continuing operations attributable to Unisys Corporation 46.0 (9.7) 75.8 (8.5)
Add interest expense on convertible notes - - - -
Non-GAAP net income (loss) attributable to Unisys Corporation for diluted earnings per share $ 46.0 $ (9.7) $ 75.8 $ (8.5)
Weighted average shares (thousands) 67,080 63,010 65,752 62,830
Plus incremental shares from assumed conversion:
Employee stock plans 740 - 903 -
Convertible notes - - - -
Non-GAAP adjusted weighted average shares 67,820 63,010 66,655 62,830
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 $ (140.8) $ (76.5) $ (298.6) $ (129.7)
Divided by weighted average shares 67,080 63,010 65,752 62,830
GAAP diluted loss per share $ (2.10) $ (1.21) $ (4.54) $ (2.06)
Non-GAAP basis
Non-GAAP net income (loss) from continuing operations attributable to Unisys Corporation for diluted earnings per share $ 46.0 $ (9.7) $ 75.8 $ (8.5)
Divided by Non-GAAP adjusted weighted average shares 67,820 63,010 66,655 62,830
Non-GAAP diluted earnings (loss) per share $ 0.68 $ (0.15) $ 1.14 $ (0.14)
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
FREE CASH FLOW
Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Cash provided by (used for) operations $ 41.9 $ (14.2) $ (1.0) $ (392.1)
Additions to marketable software (12.3) (19.4) (29.7) (36.7)
Additions to properties (6.9) (5.0) (12.0) (10.6)
Additions to outsourcing assets (3.7) (11.0) (8.7) (15.8)
Free cash flow 19.0 (49.6) (51.4) (455.2)
Postretirement funding 10.5 5.3 32.1 333.0
Discontinued operations - (0.1) - (9.1)
Cost reduction and other payments 25.0 7.3 49.4 18.0
Adjusted free cash flow $ 54.5 $ (37.1) $ 30.1 $ (113.3)
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
EBITDA
Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Net loss from continuing operations attributable to Unisys Corporation $ (140.8) $ (76.5) $ (298.6) $ (129.7)
Net income (loss) attributable to noncontrolling interests (1.5) - (1.2) 0.5
Interest expense, net of interest income of $1.9, $2.4, $3.5, $4.7, respectively* 6.5 2.2 15.1 13.8
Provision (benefit) for income taxes (53.1) 9.7 (44.7) 20.5
Depreciation 24.7 24.1 48.4 48.3
Amortization 19.4 22.4 34.9 36.0
EBITDA $ (144.8) $ (18.1) $ (246.1) $ (10.6)
Postretirement expense $ 225.7 $ 24.9 $ 394.7 $ 48.4
Debt extinguishment, cost reduction and other expenses** 10.1 34.6 29.2 66.4
Non-cash share based expense 3.7 2.9 7.0 8.0
Other expense, net adjustment*** (0.3) (2.3) 3.5 2.2
Adjusted EBITDA $ 94.4 $ 42.0 $ 188.3 $ 114.4
*Included in other (expense), net on the consolidated statements of income (loss)
**Reduced for depreciation and amortization included above
***Other (income) expense, net as reported on the consolidated statements of income (loss) less postretirement expense, interest income and items included in cost reduction and other expenses
Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Revenue $ 517.3 $ 438.8 $ 1,027.1 $ 954.2
Net loss from continuing operations attributable to Unisys Corporation as a percentage of revenue (27.2)% (17.4)% (29.1)% (13.6)%
Adjusted EBITDA as a percentage of revenue 18.2 % 9.6 % 18.3 % 12.0 %
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
OPERATING PROFIT
Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
GAAP operating income (loss) from continuing operations $ 40.8 $ (8.5) $ 84.4 $ 11.6
Cost reduction and other expenses* 8.7 8.5 15.2 17.0
Postretirement expense** 0.6 0.8 1.9 1.6
Non-GAAP operating profit from continuing operations $ 50.1 $ 0.8 $ 101.5 $ 30.2
Revenue $ 517.3 $ 438.8 $ 1,027.1 $ 954.2
GAAP operating profit (loss) percent 7.9 % (1.9)% 8.2 % 1.2 %
Non-GAAP operating profit percent 9.7 % 0.2 % 9.9 % 3.2 %
*Included in cost of revenue, selling, general and administrative and research and development on the consolidated statements of income (loss)
**Included in selling, general and administrative on the consolidated statements of income (loss)
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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