REG-Unisys Corp: Unisys Announces 2Q FY18 Results
01/08/2018 07:05
Unisys Announces 2Q FY18 Results; Services Revenue and Backlog Grow
Year-Over-Year, and Total Operating Profit Margin Expands; Company Reaffirms
Full-Year Financial Guidance
Third consecutive quarter of total revenue growth; Services backlog grows 27
percent year-over-year
BLUE BELL, Pa., July 31, 2018 /PRNewswire/ --
2Q 2018:
* Total revenue of $667 million reflects Services revenue growth of 2.1
percent year-over-year
* The company achieved operating profit margin of 8.1 percent, up 860 basis
points year-over-year and non-GAAP operating profit((6)) margin of 8.3
percent, up 440 basis points year-over-year
* Net income was $4 million versus a loss of $42 million in the prior-year
period; Adjusted EBITDA grew 46 percent year-over-year to $99 million
* Total Contract Value((1)) ("TCV") grew 70 percent year-over-year in the
quarter and 120 percent for the first half; new business TCV rose 102 percent
year-over-year in the quarter and 126 percent in the first half
* Services backlog((4)) was up 27 percent year-over-year to $4.6 billion
* Diluted earnings per share was $0.07 versus a diluted loss per share of
$0.83 in the prior-year period; non-GAAP diluted earnings per share was $0.39
versus $0.06 in the prior-year period
Unisys Corporation (http://www.unisys.com/) (NYSE: UIS) today reported
second-quarter 2018 financial results. Total company revenue of $667 million
reflects Services revenue growth of 2.1 percent year-over-year. Operating
profit margin was 8.1 percent, up 860 basis points year-over-year. Non-GAAP
operating profit margin expanded to 8.3 percent, up 440 basis points
year-over-year.
The company reported strong contract signings with Total Contract Value (or
"TCV") up 70 percent year-over-year for the quarter and 120 percent for the
first half. New business TCV was up 102 percent in the quarter and 126 percent
in the first half. Services backlog was up 27 percent year-over-year to $4.6
billion.
"We are pleased to see solid revenue performance, with our third consecutive
quarter of year-over-year growth, margin expansion for the company overall and
improvements within our Services business, which saw revenue grow more than 2
percent year-over-year," said Unisys Chairman, President and CEO Peter A.
Altabef. "Our strong second quarter results indicate continued progression
toward our goals for 2018."
Summary of Second-Quarter 2018 Business Results
Company:
Revenue of $667 million reflected growth in Services revenue of 2.1 percent
year-over-year (total revenue was down 1.2 percent on a constant-currency((3))
basis).
Operating profit margin was 8.1 percent, up 860 basis points year-over-year.
Non-GAAP operating profit margin was 8.3 percent, an increase of 440 basis
points year-over-year.
Net income for the second quarter was $3.8 million, versus a net loss of $42.0
million in the second quarter of 2017. Diluted earnings per share was $0.07,
versus a diluted loss per share of $0.83 in the second quarter of 2017.
Non-GAAP diluted earnings per share((10)) was $0.39 versus $0.06 in the
prior-year period.
Adjusted EBITDA((9)) for the second quarter grew 46.4 percent year-over-year
to $99.0 million. Adjusted EBITDA margin for the second quarter expanded by
470 basis points year-over-year to 14.8 percent.
Second quarter cash used in operations was $11.7 million versus $49.2 million
used in operations in the second quarter 2017. Second quarter adjusted free
cash flow((12)) was $(4.6) million, versus $(43.5) million in the second
quarter of 2017. At June 30, 2018, the company had $584 million in cash and
cash equivalents.
TCV grew 70 percent year over year, and new business TCV grew 102 percent. On
a cumulative basis for the first half of 2018, TCV was up 120 percent year
over year, with new business TCV up 126 percent year-over-year.
The company reaffirms full-year 2018 guidance for non-GAAP adjusted revenue of
$2.7-2.825 billion (GAAP revenue of $2.75-2.875 billion), non-GAAP operating
profit margin of 7.75-8.75 percent (GAAP operating profit margin of 9.5-10.5
percent) and adjusted EBITDA margin of 13.7-14.9 percent.
Services:
Services revenue grew 2.1 percent year-over-year (or 0.4 percent in
constant-currency) to $587 million, which represented 88 percent of total
second-quarter revenue. Services backlog grew 27 percent year-over-year to end
the second quarter at $4.6 billion. Services gross profit margin was up 240
basis points year-over-year, to 16.5 percent, and Services operating profit
margin was up 480 basis points year-over-year to 3.2 percent. Services SG&A
was helped in part by the gain on the sale of a property in the UK.
Technology:
Technology revenue in the second quarter was roughly in line with company
expectations due to the timing of the ClearPath Forward(®) renewal schedule
at $81 million, down 11.7 percent year-over-year as reported (11.3 percent in
constant currency). Technology revenue represented 12 percent of total
second-quarter revenue. Technology gross profit margin for the second quarter
was up 830 basis points year-over-year to 67.1 percent. Technology operating
profit margin was up 960 basis points year-over-year to 45.1 percent. The
improvements to Technology margins were driven in part by a higher mix of
software revenue in the quarter.
Key Second-Quarter Contract Signings:
In the second quarter, the company entered into several key contracts in each
of its sectors including the following:
* U.S. Federal: During the second quarter, we successfully implemented a
Stealth™ solution for a U.S. federal national security agency to provide
enhanced biometric identity management capabilities for an international
collaboration partner. Unisys' Stealth(®) solution was chosen due to its
scalable architecture, allowing for the use of dozens of biometric capture
systems to be integrated with existing law enforcement, national security and
other government credentialing systems.
* Public: Unisys was awarded a contract by the State of Georgia, a new logo,
to provide hybrid cloud services in support of the Georgia Enterprise
Technology Services program. This program provides reliable, secure and
innovative IT infrastructure services to Georgia state and local government
agencies.
* Commercial: A large Australian private health provider signed a contract for
Unisys to provide a Managed Security Information and Event Management (SIEM)
system. The solution includes technology from Unisys partner LogRhythm, a
leader in security intelligence and analytics. The Unisys solution will allow
the organization to secure its environment by quickly and efficiently
detecting and neutralizing advanced cyber threats before they can disrupt
operations. A Unisys Security Operations Centre will manage the SIEM and
provide 24/7 detection and response services.
* Financial Services: A leading U.S. financial services holding company signed
an agreement with Unisys for a range of infrastructure and IT services,
including deskside support, service desk, data center and network management
designed to improve the efficiency of their day-to-day operations and service
management expertise. It was Unisys' largest financial services contract of
the quarter.
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 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)) Total Contract Value – TCV is the estimated total contractual revenue
related to contracts signed in the period including option years (Federal
contracts only) and without regard for cancellation terms. New business TCV
represents TCV attributable to new scope for existing clients and new logo
contracts.
((2)) Annual Contract Value – ACV represents the revenue expected to be
recognized during the first twelve months following the signing of a contract
in the period.
((3)) 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.
((4)) Services Backlog – Services Backlog is the balance of contracted
services revenue not yet recognized, including only the funded portion of
services contracts with the U.S. Federal government.
Non-GAAP and Other Information
Although appropriate under generally accepted accounting principles ("GAAP"),
the company's results reflect revenue and charges that the company believes
are not indicative of its ongoing operations and that can make its revenue,
profitability and liquidity results difficult to compare to prior periods,
anticipated future periods, or to its competitors' results. These items
consist of certain portions of revenue, post-retirement and cost-reduction and
other expense. Management believes each of these items can distort the
visibility of trends associated with the company's ongoing performance.
Management also believes that the evaluation of the company's financial
performance can be enhanced by use of supplemental presentation of its results
that exclude the impact of these items in order to enhance consistency and
comparativeness with prior or future period results. The following measures
are often provided and utilized by the company's management, analysts, and
investors to enhance comparability of year-over-year results, as well as to
compare results to other companies in our industry.
((5)) Non-GAAP adjusted revenue – For the first half of 2018, the
company's non-GAAP results include an adjustment to exclude certain revenue.
The company has excluded revenue of $53 million. This is revenue from software
license extensions and renewals which were contracted for in the fourth
quarter of 2017 and properly recorded as revenue at that time under the
revenue recognition rules then in effect (ASC 605). Upon adoption of the new
revenue recognition rules (ASC 606) on January 1, 2018, and since the company
adopted ASC 606 under the modified retrospective method whereby prior periods
were not restated, the company was required to include this $53 million in the
cumulative effect adjustment to retained earnings on January 1, 2018. ASC 606
requires revenue related to software license renewals or extensions to be
recorded when the new license term begins, which in the case of the $53
million is January 1, 2018. The company has excluded revenue and related
profit for these software licenses in its non-GAAP results since it has been
previously reported in 2017. This is a one-time adjustment and it will not
reoccur in future periods. However, in its quarterly financial statements on
Form 10-Q for all of 2018, the company is required to report what its
financial statements would have been if it had not adopted ASC 606. The $53
million is included in those adjustments. There are additional adjustments
being made, but they do not represent previously recorded revenue. Those
adjustments represent other differences between ASC 605 and ASC 606,
principally extended payment term software licenses and short-term software
licenses both of which are recorded at the inception of the license term under
ASC 606 but were required to be recognized ratably over the software license
term under ASC 605.
((6)) Non-GAAP operating profit - The company recorded pretax post-retirement
expense and pretax charges in connection with cost-reduction activities and
other expenses. For the company, non-GAAP operating profit excluded these
items. The company believes that this profitability measure is more indicative
of the company's operating results and aligns those results to the company's
external guidance which is used by the company's management to allocate
resources and may be used by analysts and investors to gauge the company's
ongoing performance. In the first half of 2018, the company included the ASC
606 adjustment discussed in (5) above.
((7) ) Non-GAAP adjusted Technology gross profit margin – In the first half
of 2018, the company included the ASC 606 adjustment discussed in (5) above.
((8)) Non-GAAP adjusted Technology operating profit margin – In the first
half of 2018, the company included the ASC 606 adjustment discussed in (5)
above.
((9)) EBITDA & adjusted EBITDA – Earnings before interest, taxes,
depreciation and amortization ("EBITDA") is calculated by starting with net
income (loss) attributable to Unisys Corporation common shareholders and
adding or subtracting the following items: net income attributable to
noncontrolling interests, interest expense (net of interest income), provision
for income taxes, depreciation and amortization. Adjusted EBITDA further
excludes post-retirement expense, cost-reduction and other expense, non-cash
share-based expense, and other (income) expense adjustment. In order to
provide investors with additional understanding of the company's operating
results, these charges are excluded from the adjusted EBITDA calculation. In
the first half of 2018, the company included the ASC 606 adjustment discussed
in (5) above.
((10)) Non-GAAP diluted earnings per share - The company has recorded
post-retirement expense and charges in connection with cost-reduction
activities and other expenses. Management believes that investors may have a
better understanding of the company's performance and return to shareholders
by excluding these charges from the GAAP diluted earnings/loss per share
calculations. The tax amounts presented for these items for the calculation of
non-GAAP diluted earnings per share include the current and deferred tax
expense and benefits recognized under GAAP for these amounts. In the first
half of 2018, the company included the ASC 606 adjustment discussed in (5)
above.
((11)) Free cash flow - The company defines free cash flow as cash flow from
operations less capital expenditures. Management believes this liquidity
measure gives investors an additional perspective on cash flow from on-going
operating activities in excess of amounts used for reinvestment.
((12)) Adjusted free cash flow - Because inclusion of the company's
post-retirement contributions and cost-reduction and other payments in free
cash flow may distort the visibility of the company's ability to generate cash
flow from its operations without the impact of these non-operational costs,
management believes that investors may be interested in adjusted free cash
flow, which provides free cash flow before these payments. This liquidity
measure was provided to analysts and investors in the form of external
guidance and is used by management to measure operating liquidity.
About Unisys
Unisys is a global information technology company that builds
high-performance, security-centric solutions for the most demanding businesses
and governments on Earth. Unisys offerings include security software and
services; digital transformation and workplace services; industry applications
and services; and innovative software operating environments for
high-intensity enterprise computing. For more information on how Unisys builds
better outcomes securely for its clients across the Government, Financial
Services and Commercial markets, visit 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, annual contract value, total
contract value, new business ACV or TCV, backlog or other financial items; any
statements of the company's plans, strategies or objectives for future
operations; statements regarding future economic conditions or performance;
and any statements of belief or expectation. All forward-looking statements
rely on assumptions and are subject to various risks and uncertainties that
could cause actual results to differ materially from expectations. In
particular, statements concerning annual and total contract value are based,
in part, on the assumption that all options of the contracts (Federal only)
included in the calculation of such value will be exercised and that each of
those contracts will continue for their full contracted term. Risks and
uncertainties that could affect the company's future results include, but are
not limited to, the following: our ability to improve revenue and margins in
our services business; our ability to maintain our installed base and sell new
solutions in our technology business; our ability to effectively anticipate
and respond to volatility and rapid technological innovation in our industry;
our ability to retain significant clients; the potential adverse effects of
aggressive competition in the information services and technology marketplace;
cybersecurity breaches could result in significant costs and could harm our
business and reputation; our significant pension obligations and required cash
contributions and requirements to make additional significant cash
contributions to our defined benefit pension plans; our ability to attract,
motivate and retain experienced and knowledgeable personnel in key positions;
the risks of doing business internationally when a significant portion of our
revenue is derived from international operations; our contracts may not be as
profitable as expected or provide the expected level of revenues; our ability
to access financing markets; contracts with U.S. governmental agencies may
subject us to audits, criminal penalties, sanctions and other expenses and
fines; a significant disruption in our IT systems could adversely affect our
business and reputation; we may face damage to our reputation or legal
liability if our clients are not satisfied with our services or products; the
performance and capabilities of third parties with whom we have commercial
relationships; an involuntary termination of the company's U.S. qualified
defined benefit pension plan; the potential for intellectual property
infringement claims to be asserted against us or our clients; the business and
financial risk in implementing future acquisitions or dispositions; the
adverse effects of global economic conditions, acts of war, terrorism or
natural disasters; the possibility that pending litigation could affect our
results of operations or cash flow; 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.: 0731/9606
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 Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Revenue
Services $ 586.7 $ 574.8 $ 1,155.2 $ 1,160.1
Technology 80.7 91.4 220.6 170.6
667.4 666.2 1,375.8 1,330.7
Costs and expenses
Cost of revenue:
Services 484.2 510.8 * 955.1 997.2 *
Technology 30.3 36.7 * 66.6 76.2 *
514.5 547.5 * 1,021.7 1,073.4 *
Selling, general and administrative 92.7 111.4 * 183.6 216.4 *
Research and development 6.2 10.8 * 14.7 22.6 *
613.4 669.7 * 1,220.0 1,312.4 *
Operating profit (loss) 54.0 (3.5) * 155.8 18.3 *
Interest expense 15.7 14.3 32.3 20.0
Other income (expense), net (18.0) (24.5) * (40.6) (57.4) *
Income (loss) before income taxes 20.3 (42.3) 82.9 (59.1)
Provision (benefit) for income taxes 14.3 (3.8) 35.2 9.1
Consolidated net income (loss) 6.0 (38.5) 47.7 (68.2)
Net income attributable to noncontrolling interests 2.2 3.5 3.3 6.5
Net income (loss) attributable to Unisys Corporation common shareholders $ 3.8 $ (42.0) $ 44.4 $ (74.7)
Earnings (loss) per share attributable to Unisys Corporation
Basic $ 0.07 $ (0.83) $ 0.87 $ (1.48)
Diluted $ 0.07 $ (0.83) $ 0.74 $ (1.48)
Shares used in the per share computations (in thousands):
Basic 50,986 50,437 50,867 50,346
Diluted 51,398 50,437 73,105 50,346
* Certain amounts have been reclassified to conform to the current-year presentation.
UNISYS CORPORATION
SEGMENT RESULTS
(Unaudited)
(Millions)
Total Eliminations Services Technology
Three Months Ended June 30, 2018
Customer revenue $ 667.4 $ — $ 586.7 $ 80.7
Intersegment — (4.0) — 4.0
Total revenue $ 667.4 $ (4.0) $ 586.7 $ 84.7
Gross profit percent 22.9 % 16.5 % 67.1 %
Operating profit percent 8.1 % 3.2 % 45.1 %
Three Months Ended June 30, 2017
Customer revenue $ 666.2 $ — $ 574.8 $ 91.4
Intersegment — (5.4) — 5.4
Total revenue $ 666.2 $ (5.4) $ 574.8 $ 96.8
Gross profit percent 17.8 % * 14.1 % 58.8 %
Operating profit (loss) percent (0.5)% * (1.6)% 35.5 %
Total Eliminations Services Technology
Six Months Ended June 30, 2018
Customer revenue $ 1,375.8 $ — $ 1,155.2 $ 220.6
Intersegment — (14.0) — 14.0
Total revenue $ 1,375.8 $ (14.0) $ 1,155.2 $ 234.6
Gross profit percent 25.7 % 16.5 % 68.2 %
Operating profit percent 11.3 % 3.1 % 51.2 %
Six Months Ended June 30, 2017
Customer revenue $ 1,330.7 $ — $ 1,160.1 $ 170.6
Intersegment — (10.7) — 10.7
Total revenue $ 1,330.7 $ (10.7) $ 1,160.1 $ 181.3
Gross profit percent 19.3 % * 16.2 % 53.1 %
Operating profit percent 1.4 % * 1.5 % 26.1 %
* Certain amounts have been reclassified to conform to the current-year presentation.
UNISYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Millions)
June 30, December 31,
2018 2017
Assets
Current assets:
Cash and cash equivalents $ 584.3 $ 733.9
Accounts receivable, net 484.0 503.3
Contract assets 38.3 —
Inventories:
Parts and finished equipment 12.5 13.6
Work in process and materials 10.2 12.5
Prepaid expenses and other current assets 117.6 126.2
Total current assets 1,246.9 1,389.5
Properties 855.6 898.8
Less-Accumulated depreciation and amortization 739.9 756.3
Properties, net 115.7 142.5
Outsourcing assets, net 208.8 202.3
Marketable software, net 150.7 138.3
Prepaid postretirement assets 152.5 148.3
Deferred income taxes 106.5 119.9
Goodwill 178.7 180.8
Restricted cash 16.8 30.2
Other long-term assets 194.3 190.6
Total assets $ 2,370.9 $ 2,542.4
Liabilities and deficit
Current liabilities:
Current maturities of long-term-debt $ 10.2 $ 10.8
Accounts payable 219.9 241.8
Deferred revenue 284.6 327.5
Other accrued liabilities 319.1 391.5
Total current liabilities 833.8 971.6
Long-term debt 638.1 633.9
Long-term postretirement liabilities 1,886.8 2,004.4
Long-term deferred revenue 177.3 159.0
Other long-term liabilities 79.0 100.0
Commitments and contingencies
Total deficit (1,244.1) (1,326.5)
Total liabilities and deficit $ 2,370.9 $ 2,542.4
UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Millions)
Six Months Ended June 30,
2018 2017
Cash flows from operating activities
Consolidated net income (loss) $ 47.7 $ (68.2)
Adjustments to reconcile consolidated net (income) loss to net cash used for operating activities:
Foreign currency transaction losses 1.5 5.1
Non-cash interest expense 5.2 4.4
Loss on debt extinguishment — 1.5
Employee stock compensation 7.3 6.2
Depreciation and amortization of properties 21.6 19.8
Depreciation and amortization of outsourcing assets 31.9 26.3
Amortization of marketable software 28.6 31.8
Other non-cash operating activities (1.6) 2.5
Loss on disposal of capital assets 0.3 4.2
Gain on sale of properties (7.1) —
Postretirement contributions (72.9) (76.2) *
Postretirement expense 38.5 49.2 *
Decrease (increase) in deferred income taxes, net 8.3 (0.4)
Changes in operating assets and liabilities:
Receivables, net (21.2) (57.4)
Inventories (0.8) (2.6)
Accounts payable and other accrued liabilities (152.8) (28.3)
Other liabilities 10.8 (7.0) *
Other assets (7.2) (1.1)
Net cash used for operating activities (61.9) (90.2)
Cash flows from investing activities
Proceeds from investments 2,028.8 2,502.0
Purchases of investments (2,034.6) (2,487.1)
Investment in marketable software (41.1) (28.8)
Capital additions of properties (9.9) (15.9)
Capital additions of outsourcing assets (42.4) (36.9)
Net proceeds from sale of properties 19.7 —
Other (0.9) (0.3)
Net cash used for investing activities (80.4) (67.0)
Cash flows from financing activities
Proceeds from issuance of long-term debt — 445.0
Issuance costs related to long-term debt — (11.7)
Payments of long-term debt (1.3) (97.7)
Other (2.1) (2.1)
Net cash (used for) provided by financing activities (3.4) 333.5
Effect of exchange rate changes on cash, cash equivalents and restricted cash (17.3) 12.8
(Decrease) increase in cash, cash equivalents and restricted cash (163.0) 189.1
Cash, cash equivalents and restricted cash, beginning of period 764.1 401.1
Cash, cash equivalents and restricted cash, end of period $ 601.1 $ 590.2
* Certain amounts have been reclassified to conform to the current-year presentation.
UNISYS CORPORATION
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited)
(Millions, except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
2018 2017 2018 2017
GAAP net income (loss) attributable to Unisys Corporation common shareholders $ 3.8 $ (42.0) $ 44.4 $ (74.7)
Topic 606 adjustment: pretax — — (53.0) —
tax provision — — 5.3 —
net of tax — — (47.7) —
Postretirement expense: pretax 19.2 23.0 * 38.5 49.2 *
tax provision 0.2 1.6 0.5 1.8
net of tax 19.4 24.6 * 39.0 51.0 *
Cost reduction and other expense: pretax 0.7 29.0 (2.2) 54.4
tax provision — (8.5) 0.1 (9.0)
net of tax 0.7 20.5 (2.1) 45.4
Non-GAAP net income attributable to Unisys Corporation common shareholders 23.9 3.1 * 33.6 21.7 *
Add interest expense on convertible notes 4.9 — 9.7 —
Non-GAAP net income attributable to Unisys Corporation for diluted earnings per share $ 28.8 $ 3.1 * $ 43.3 $ 21.7 *
Weighted average shares (thousands) 50,986 50,437 50,867 50,346
Plus incremental shares from assumed conversion:
Employee stock plans 412 295 370 341
Convertible notes 21,868 — 21,868 —
Non-GAAP adjusted weighted average shares 73,266 50,732 73,105 50,687
Diluted earnings (loss) per share
GAAP basis
GAAP net income (loss) attributable to Unisys Corporation for diluted earnings per share $ 3.8 $ (42.0) $ 54.1 $ (74.7)
Divided by adjusted weighted average shares 51,398 50,437 73,105 50,346
GAAP diluted earnings (loss) per share $ 0.07 $ (0.83) $ 0.74 $ (1.48)
Non-GAAP basis
Non-GAAP net income attributable to Unisys Corporation for diluted earnings per share $ 28.8 $ 3.1 * $ 43.3 $ 21.7 *
Divided by Non-GAAP adjusted weighted average shares 73,266 50,732 73,105 50,687
Non-GAAP diluted earnings per share $ 0.39 $ 0.06 * $ 0.59 $ 0.43 *
* Certain amounts have been reclassified to conform to the current-year presentation.
UNISYS CORPORATION
RECONCILIATION OF GAAP OPERATING PROFIT TO NON-GAAP OPERATING PROFIT
(Unaudited)
(Millions)
Three Months Six Months
Ended June 30, Ended June 30,
2018 2017 2018 2017
GAAP operating profit (loss) $ 54.0 $ (3.5) * $ 155.8 $ 18.3 *
Topic 606 adjustment — — (53.0) —
Postretirement expense 0.9 1.7 * 1.9 3.4 *
Cost reduction and other expense 0.7 27.8 (2.2) 47.9
Non-GAAP operating profit $ 55.6 $ 26.0 * $ 102.5 $ 69.6 *
GAAP customer revenue $ 667.4 $ 666.2 $ 1,375.8 $ 1,330.7
Non-GAAP adjusted customer revenue $ 667.4 $ 666.2 $ 1,322.8 $ 1,330.7
GAAP operating profit (loss) % 8.1 % (0.5)% * 11.3 % 1.4 % *
Non-GAAP operating profit % 8.3 % 3.9 % * 7.7 % 5.2 % *
* Certain amounts have been reclassified to conform to the current-year presentation.
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
FREE CASH FLOW
Three Months Six Months
Ended June 30, Ended June 30,
2018 2017 2018 2017
Cash used for operations $ (11.7) $ (49.2) $ (61.9) $ (90.2)
Additions to marketable software (22.1) (15.0) (41.1) (28.8)
Additions to properties (4.8) (7.4) (9.9) (15.9)
Additions to outsourcing assets (18.0) (24.0) (42.4) (36.9)
Free cash flow (56.6) (95.6) (155.3) (171.8)
Postretirement funding 42.0 44.5 * 72.9 76.2 *
Cost reduction and other payments 10.0 7.6 27.0 28.8
Adjusted free cash flow $ (4.6) $ (43.5) * $ (55.4) $ (66.8) *
* Certain amounts have been reclassified to conform to the current-year presentation.
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
EBITDA
Three Months Six Months
Ended June 30, Ended June 30,
2018 2017 2018 2017
Net income (loss) attributable to Unisys Corporation common shareholders $ 3.8 $ (42.0) $ 44.4 $ (74.7)
Net income attributable to noncontrolling interests 2.2 3.5 3.3 6.5
Interest expense, net of interest income of $3.1, $2.2, $6.3, $4.6 respectively** 12.6 12.1 26.0 15.4
Provision (benefit) for income taxes 14.3 (3.8) 35.2 9.1
Depreciation 26.2 23.1 53.5 46.1
Amortization 13.9 16.1 28.6 31.8
EBITDA $ 73.0 $ 9.0 $ 191.0 $ 34.2
Topic 606 adjustment — — (53.0) —
Postretirement expense 19.2 23.0 * 38.5 49.2 *
Cost reduction and other expense 0.7 29.0 (2.2) 54.4
Non-cash share based expense 3.3 2.5 7.3 6.2
Other (income) expense adjustment*** 2.8 4.1 10.3 9.6
Adjusted EBITDA $ 99.0 $ 67.6 * $ 191.9 $ 153.6 *
* Certain amounts have been reclassified to conform to the current-year presentation.
** 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 postretirement expense, interest income and items included in cost reduction and other expense
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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