REG-Unisys Corp: Unisys Closes Sale of U.S. Federal Business to SAIC

UnisysAnnouncement

16/03/2020 11:30

Unisys Closes Sale of U.S. Federal Business to SAIC

$1.2 billion transaction significantly strengthens company's balance sheet and
cash flow profile, increases operational flexibility; company expects to use
net proceeds largely to pay down debt and reduce pension obligations

Company promotes Eric Hutto to president and chief operating officer

BLUE BELL, Pa., March 16, 2020 /PRNewswire/ -- Unisys Corporation
(https://c212.net/c/link/?t=0&l=en&o=2749942-1&h=491298492&u=https%3A%2F%2Fwww.unisys.com%2F&a=Unisys+Corporation) (NYSE:
UIS) today announced the close of the sale of the company's U.S. Federal
business to Science Applications International Corp. (NYSE: SAIC).

Net proceeds from the transaction, which the company announced on February 6
(https://c212.net/c/link/?t=0&l=en&o=2749942-1&h=2103056968&u=https%3A%2F%2Fwww.unisys.com%2Fnews%2Fnews%2520release%2Funisys-federal-business-saic-company-achieves-guidance-on-metrics&a=which+the+company+announced+on+February+6),
are largely expected to be used to pay down debt and reduce pension
obligations, thereby significantly improving Unisys' balance sheet and cash
flow profile, U.S. pension funded status and overall financial flexibility.
Related to this, the company also announced that it has issued a notice of
redemption to redeem all $440 million in aggregate principal amount of its
outstanding 10.750% Senior Secured Notes due 2022. Pro forma for the
transaction, the company's net leverage (inclusive of pension deficit) has
been reduced from 4.3x 2019 Adj. EBITDA((1)) pre-transaction to 2.4x on a pro
forma basis.

"The transaction ushers in a more agile Unisys," said Unisys Chairman and CEO
Peter Altabef. "The improved capital structure that comes from the sale of
U.S. Federal positions Unisys with improved operational flexibility to better
serve our clients and provides the potential for delivering increased value to
shareholders."

Company Promotes Eric Hutto
In conjunction with the announcement of the transaction's close, Unisys also
today announced the appointment of Eric Hutto
(https://c212.net/c/link/?t=0&l=en&o=2749942-1&h=1827963936&u=https%3A%2F%2Fwww.unisys.com%2Finvestor-relations%2FCorporate-Officers%2Feric-hutto&a=Eric+Hutto),
senior vice president and president of the Enterprise Solutions business, as
the company's president and chief operating officer. Enterprise Solutions and
U.S. Federal were the company's two business units prior to the sale of U.S.
Federal.

"Eric's business acumen, hard work and visionary leadership have all been on
display since he joined the company in 2015," Altabef said. "Eric brings
passion and a competitive will to win that is contagious among our associates,
and he will help drive Unisys to continued success. I look forward to working
closely with him in taking our company forward."

Non-GAAP and Other Information
Although appropriate under generally accepted accounting principles ("GAAP"),
the company's results reflect revenue and charges that the company believes
are not indicative of its ongoing operations and that can make its revenue,
profitability and liquidity results difficult to compare to prior periods,
anticipated future periods, or to its competitors' results. These items
consist of certain portions of revenue, post-retirement, debt exchange and
cost-reduction and other expenses. Management believes each of these items can
distort the visibility of trends associated with the company's ongoing
performance. Management also believes that the evaluation of the company's
financial performance can be enhanced by use of supplemental presentation of
its results that exclude the impact of these items in order to enhance
consistency and comparativeness with prior or future period results. The
following measures are often provided and utilized by the company's
management, analysts, and investors to enhance comparability of year-over-year
results, as well as to compare results to other companies in our industry.

((1) ) 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 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, post-retirement, debt
exchange, and cost-reduction and other expenses, non-cash share-based expense,
and other (income) expense adjustments. In order to provide investors with
additional understanding of the company's operating results, these charges are
excluded from the adjusted EBITDA calculation. Pro forma adjusted EBITDA
excludes Adjusted EBITDA for U.S. Federal business for the full year 2019. 

About Unisys
Unisys is a global information technology company that builds
high-performance, security-centric solutions for the most demanding businesses
and governments. Unisys offerings include security software and services;
digital transformation and workplace services; industry applications and
services; and innovative software operating environments for high-intensity
enterprise computing. For more information on how Unisys builds better
outcomes securely for its clients across the government, commercial and
financial services markets, visit www.unisys.com.

Follow Unisys on Twitter
(https://c212.net/c/link/?t=0&l=en&o=2749942-1&h=2243675454&u=http%3A%2F%2Ftwitter.com%2FUnisysCorp&a=Twitter)
and LinkedIn
(https://c212.net/c/link/?t=0&l=en&o=2749942-1&h=4235575686&u=http%3A%2F%2Fwww.linkedin.com%2Fcompany%2Funisys&a=LinkedIn).

Forward-Looking Statements
Any statements contained in this release are not historical facts, including
those regarding future performance, are forward-looking statements under the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations, assumptions, anticipated events
or trend, beliefs relating to matters that are not historical in nature and
involve risks and uncertainties that could cause actual results to differ from
expectations, all of which are difficult to predict and many of which are
beyond the control of the company. Actual results may differ materially from
the company's current expectations depending upon a number of factors
affecting the company's business and risks associated with the transaction.
These factors include, among others: the ability of the company to achieve the
intended benefits of the transaction (including, without limitation, risks
related to the ability of the company to repay certain indebtedness and reduce
pension obligations following the closing of the transaction); the risk
related to the change of the company's business structure and a decrease in
the size of the company following the closing of the transaction;  the risk
related to the company's ability to operate its business as a going-concern
following the closing of the transaction; the company's ability to continue
revenue growth and margin expansion in its services business; the company's
significant pension obligations and required cash contributions and
requirements to make additional significant cash contributions to its defined
benefit pension plans; the company's ability to access financing markets; a
reduction in the company's credit rating; the company's ability to maintain
its installed base and sell new solutions; the potential adverse effects of
aggressive competition in the information services and technology marketplace;
cybersecurity breaches could result in significant costs and could harm the
company's business and reputation; the company's ability to effectively
anticipate and respond to volatility and rapid technological innovation in its
industry; the company's ability to retain significant clients; the company's
contracts may not be as profitable as expected or provide the expected level
of revenues; the risks of doing business internationally when a significant
portion of the company's revenue is derived from international operations; 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 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; the company's ability to attract, motivate and retain
experienced and knowledgeable personnel in key positions; a significant
disruption in the company's IT systems could adversely affect its business and
reputation; the company may face damage to its reputation or legal liability
if its clients are not satisfied with the company's services or products; the
performance and capabilities of third parties with whom the company has
commercial relationships; an involuntary termination of the company's U.S.
qualified defined benefit pension plans; the potential for intellectual
property infringement claims to be asserted against the company or its
clients; and the possibility that legal proceedings could affect the company's
results of operations or cash flow or may adversely affect the company's
business or reputation;. These risks and uncertainties are discussed in the
company's reports filed with the SEC, including but not limited to the
company's annual report on Form 10-K and in its subsequent reports on Form
10-Q and periodic reports on Form 8-K, and from time to time in the company's
other investor communications. Except as expressly required by law, the
company assumes no obligation to update any forward-looking statement to
reflect events or circumstances that occur after the date on which the
statement is made.  

RELEASE NO.: 0316/9758

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-C

CONTACT: Investors: Courtney Holben, Unisys, 215-986-3379,
courtney.holben@unisys.com or Media: Tony Buglione, Unisys, 1-215-274-1942,
tony.buglione@unisys.com



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