REG-Unisys Corporation: Unisys Announces 4Q and Full-Year 2023 Results
21/02/2024 12:30
Unisys Announces 4Q and Full-Year 2023 Results
Company Exceeds 2023 Upwardly Revised Revenue and Profitability Guidance,
Delivers Strong Growth in Contract Signings in 4Q
* Full-year revenue growth of 1.8% year over year (YoY), or 1.6% in constant
currency(1); Excluding License and Support (Ex-L&S)(15) revenue growth of
4.9% YoY both as reported and in constant currency
* 4Q revenue up 0.1% YoY, a decline of 2.1% in constant currency; 4Q Ex-L&S
revenue growth of 6.8% YoY, or 4.3% in constant currency
* Full-year operating profit margin of 3.8%; non-GAAP operating
profit(8) margin of 7.0%
* Full-year operating cash flow of $74.2 million compared to $12.7 million for
2022, and free cash flow(11) of ($4.5) million compared to ($73.2) million
for 2022
* Ex-L&S Total Contract Value (TCV)(4) increased 27% YoY for the full-year
and 137% YoY in the fourth quarter, including New Business(6) TCV growth of
18% YoY for the full-year and 84% YoY in the fourth quarter
* Company issues full-year 2024 guidance of (1.5)% to 1.5% YoY constant
currency revenue growth and 5.5% to 7.5% non-GAAP operating profit margin
* Constant currency revenue guidance implies (1.0)% to 2.0% revenue growth as
reported, based on recent exchange rates, and assumes Ex-L&S full-year revenue
growth of 1.5% to 5.0% and License and Support (L&S)(14) revenue of
approximately $375 million
BLUE BELL, Pa., Feb. 21, 2024/ -- Unisys
(https://c212.net/c/link/?t=0&l=en&o=4096254-1&h=3429131828&u=https%3A%2F%2Fwww.unisys.com%2F&a=Unisys) (NYSE:
UIS) reported financial results for the fourth quarter and full year 2023.
"Our fourth quarter performance capped a successful year for Unisys," said
Unisys Chair and CEO Peter A. Altabef. "In 2023, we exceeded our upwardly
revised full-year guidance ranges. During the year, we grew our backlog,
signed 18% more New Business TCV than the prior year, and expanded our New
Business pipeline."
"This year, we progressed towards our long-term financial goals," said Unisys
Chief Financial Officer Deb McCann. "We are particularly pleased with our
full-year free cash flow performance, which improved by nearly $70 million
year-over-year. We also continued to execute our pension management strategy
with two annuity purchases that transferred an aggregate of approximately $500
million in pension liabilities to a third-party insurer."
Financial Highlights
Please refer to the accompanying financial tables for a reconciliation of the
GAAP to non-GAAP measures presented except for financial guidance since such a
reconciliation is not practicable without unreasonable effort.
(In millions, except numbers presented as percentages) 4Q23 4Q22 FY23 FY22
Revenue $557.6 $557.0 $2,015.4 $1,979.9
YoY revenue growth 0.1 % 1.8 %
YoY revenue growth in constant currency (2.1) % 1.6 %
Ex-L&S revenue $413.3 $386.9 $1,586.3 $1,511.9
YoY revenue growth 6.8 % 4.9 %
YoY revenue growth in constant currency 4.3 % 4.9 %
L&S revenue $144.3 $170.1 $429.1 $468.0
YoY revenue growth (15.2) % (8.3) %
YoY revenue growth in constant currency (16.9) % (9.0) %
Gross profit $181.2 $189.8 $551.3 $529.6
Gross profit percent 32.5 % 34.1 % 27.4 % 26.7 %
Ex-L&S gross profit $68.4 $45.7 $240.0 $168.8
Ex-L&S gross profit percent 16.5 % 11.8 % 15.1 % 11.2 %
Operating profit $44.0 $50.0 $76.9 $52.2
Operating profit percent 7.9 % 9.0 % 3.8 % 2.6 %
Non-GAAP operating profit $64.0 $112.4 $140.8 $159.0
Non-GAAP operating profit percent 11.5 % 20.2 % 7.0 % 8.0 %
Net (loss) income attributable to Unisys Corporation ($165.3) $8.5 ($430.7) ($106.0)
Non-GAAP net income attributable to Unisys Corporation (10) $35.4 $82.8 $41.7 $74.8
EBITDA ($103.6) $85.1 ($204.5) $140.9
Adjusted EBITDA (9) $100.4 $148.7 $285.9 $325.8
Adjusted EBITDA as a percentage of revenue 18.0 % 26.7 % 14.2 % 16.5 %
Fourth Quarter 2023 Results
Revenue was up 0.1% YoY, a decline of 2.1% in constant currency. Gross profit
margin was down 160 bps YoY driven by the timing of software license renewals.
Ex-L&S revenue increased 6.8% YoY, or 4.3% in constant currency, primarily
driven by New Business with existing clients. Gross profit margin was up 470
bps YoY primarily driven by lower cost reduction charges as well as New
Business with existing clients.
Net loss attributable to Unisys Corporation included a non-cash pension
settlement loss of $167.2 million related to the purchase of an annuity
contract that reduced pension liabilities.
Financial Highlights by Segment
(In millions, except numbers presented as percentages) 4Q23 4Q22 FY23 FY22
Digital Workplace Solutions (DWS):
Revenue $139.2 $127.8 $546.1 $509.9
YoY revenue growth 8.9 % 7.1 %
YoY revenue growth in constant currency 6.3 % 7.0 %
Gross profit $21.3 $19.3 $76.2 $71.5
Gross profit percent 15.3 % 15.1 % 14.0 % 14.0 %
Cloud, Applications & Infrastructure Solutions (CA&I):
Revenue $138.9 $138.8 $531.0 $520.3
YoY revenue growth 0.1 % 2.1 %
YoY revenue growth in constant currency (0.5) % 2.2 %
Gross profit $22.7 $26.4 $81.9 $47.3
Gross profit percent 16.3 % 19.0 % 15.4 % 9.1 %
Enterprise Computing Solutions (ECS):
Revenue $203.0 $225.6 $648.0 $669.7
YoY revenue growth (10.0) % (3.2) %
YoY revenue growth in constant currency (12.2) % (3.9) %
Gross profit $136.9 $165.4 $396.6 $432.0
Gross profit percent 67.4 % 73.3 % 61.2 % 64.5 %
Fourth Quarter 2023 Segment Results
DWS revenue increased 8.9% YoY, or a 6.3% increase in constant currency. DWS
gross profit margin was 15.3%, an increase of 20 bps YoY. The increase in
revenue and gross profit margin was primarily driven by New Business with
existing clients.
CA&I revenue increased 0.1% YoY, a 0.5% decline in constant currency. CA&I
gross profit margin was 16.3%, a decrease of 270 bps YoY, as the prior year
quarter gross profit included a benefit from the sale of surplus IP addresses.
Full-year CA&I gross profit was 15.4%, up 630 bps, as the result of delivery
improvements.
ECS revenue declined in the fourth quarter 10.0% YoY, or a 12.2% decline in
constant currency. ECS gross profit margin was 67.4%, a decrease of 590 bps
YoY. The decrease in revenue and gross profit margin was primarily driven by
the timing of software license renewals, as expected.
Balance Sheet and Cash Flow
(In millions) 4Q23 4Q22 FY23 FY22
Cash and cash equivalents $387.7 $391.8
Cash provided by operations $23.0 $34.9 $74.2 $12.7
Free cash flow $4.0 $13.8 ($4.5) ($73.2)
Pre-pension free cash flow $10.7 $23.6 $43.5 ($29.5)
Adjusted free cash flow (13) $30.9 $39.3 $120.5 $27.0
Full-year 2023 free cash flow improved by $68.7 million YoY due to
improvements in working capital.
Cash and cash equivalents at December 31, 2023 were $387.7 million.
The company continued its pension de-risking strategy during 2023 with the
purchase of two annuity contracts relating to its U.S. pension plans. The
aggregate purchase price for the two transactions was
approximately $516 million, which was funded by plan assets and resulted in
a similarly sized reduction in plan liabilities. These actions resulted in
non-cash pension settlement losses of $348.2 million.
Other Key Performance Metrics
YoY QoQ
Change Change*
4Q23
Pipeline (3)
Total company (1) % (20) %
Ex-L&S pipeline (1) % (20) %
TCV
Total company 50 % 331 %
Ex-L&S TCV 137 % 339 %
FY23
TCV
Total company 3 %
Ex-L&S TCV 27 %
* QoQ - quarter over quarter
Sequential pipeline decline was due to elevated client signings during the
fourth quarter while YoY decline was the result of renewal timing, partially
offset by growth in New Business pipeline.
In the fourth quarter and full-year of 2023, TCV growth was driven by strong
growth in New Business TCV.
Backlog was $3.01 billion for the fourth quarter 2023 compared to $2.92
billion for the fourth quarter of 2022 and $2.38 billion in the third quarter
of 2023. The sequential and YoY increase was primarily driven by timing of
Ex-L&S contract renewals and strong New Business signings during the fourth
quarter.
2024 Financial Guidance
The company has issued full-year 2024 revenue growth and profitability
guidance:
Guidance
Revenue growth in constant currency (1.5)% to 1.5%
Non-GAAP operating profit margin 5.5% to 7.5%
Constant currency revenue guidance implies (1.0)% to 2.0% revenue growth as
reported, based on recent exchanges rates, and assumes Ex-L&S full-year
revenue growth of 1.5% to 5.0% and L&S revenue of approximately $375 million.
Conference Call
Unisys will hold a conference call with the financial community on Wednesday,
February 21 at 8 a.m. Eastern Time to discuss the results and 2024 financial
guidance.
The live, listen-only webcast, as well as the accompanying presentation
materials, can be accessed on the Unisys Investor Website at
www.unisys.com/investor. In addition, domestic callers can dial 1-844-695-5518
and international callers can dial 1-412-902-6749 and provide the following
conference passcode: Unisys Corporation Call.
A webcast replay will be available on the Unisys Investor Website shortly
following the conference call. A replay will also be available by dialing
1-877-344-7529 for domestic callers or 1-412-317-0088 for international
callers and entering access code 4909173 from two hours after the end of the
call until March 6, 2024.
(1) Constant currency – A significant amount of the company's revenue is
derived from international operations. As a result, the company's revenue has
been and will continue to be affected by changes in the U.S. dollar against
major international currencies. The company refers to revenue 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 revenue at a consistent exchange rate rather than the actual
exchange rates in effect during the respective periods.
(2) Backlog – Represents future revenue associated with contracted work
which has not yet been delivered or performed. Although the company believes
this revenue will be recognized, it may, for commercial reasons, allow the
orders to be cancelled, with or without penalty.
(3) Pipeline – Represents qualified prospective sale opportunities for
which bids have been submitted or vetted prospective sales opportunities which
are being actively pursued. There is no assurance that pipeline will translate
into recorded revenue.
(4) Total Contract Value (TCV) – Represents the estimated revenue related
to contracts signed in the period without regard for cancellation terms. New
Business TCV represents TCV attributable to expansion and new scope for
existing clients and new logo contracts.
(5) Book-to-bill – Represents total contract value booked divided by
revenue in a given period.
(6) New Business – Represents expansion and new scope for existing clients
and new logo contracts.
(7) Next-Gen Solutions – Includes our Modern Workplace solutions within
DWS, Digital Platforms and Applications (DP&A) solutions within CA&I,
Specialized Services and Next-Gen Compute (SS&C) solutions within ECS, as well
as Micro-Market solutions. The company uses estimated Next-Gen Solutions
metrics to provide insight into the company's progress in shifting the revenue
mix towards solutions that are generally higher-growth and higher-margin.
(8) Non-GAAP operating profit – This measure excludes pretax
postretirement expense and pretax charges in connection with certain legal
matters related to professional services and legal fees, including legal
defense costs, associated with certain legal proceedings, and cost-reduction
activities and other expenses.
(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 (loss) attributable to
noncontrolling interests, interest expense (net of interest income), provision
for (benefit from) income taxes, depreciation and amortization. Adjusted
EBITDA further excludes postretirement expense; certain legal matters related
to professional services and legal fees, including legal defense costs,
associated with certain legal proceedings; environmental matters related to
previously disposed businesses; cost-reduction activities and other expenses,
non-cash share-based expense, and other (income) expense adjustments.
(10) Non-GAAP net income and non-GAAP diluted earnings per share – These
measures excluded postretirement expense and charges in connection with
certain legal matters related to professional services and legal fees,
including legal defense costs, associated with certain legal proceedings;
environmental matters related to previously disposed businesses; and
cost-reduction activities and other expenses. The tax amounts related to
these items for the calculation of non-GAAP diluted earnings (loss) per share
include the current and deferred tax expense and benefits recognized under
GAAP for these items.
(11) Free cash flow – Represents cash flow from operations less capital
expenditures.
(12) Pre-pension free cash flow – Represents free cash flow before
postretirement contributions.
(13) Adjusted free cash flow – Represents free cash flow less cash used
for postretirement funding; certain legal matters related to professional
services and legal fees, including legal defense costs, associated with
certain legal proceedings; environmental matters related to previously
disposed businesses; and cost-reduction activities and other payments.
(14) License and Support (L&S) – Represents software license and related
support revenue within the company's ECS segment.
(15) Excluding License and Support (Ex-L&S) – These measures exclude
revenue, gross profit and gross profit margin in connection with software
license and support revenue within the company's ECS segment. The company
provides these measures to allow investors to isolate the impact of software
license renewals, which tend to be significant and impactful based on timing,
and related support services in order to evaluate the company's business
outside of these areas.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, Section 21E of the Securities
Exchange Act of 1934, as amended, and the Private Securities Litigation Reform
Act of 1995. Unisys cautions readers that the assumptions forming the basis
for forward-looking statements include many factors that are beyond Unisys'
ability to control or estimate precisely, such as estimates of future market
conditions, the behavior of other market participants and that TCV is based,
in part, on the assumption that each of those contracts will continue for
their full contracted term. Words such as "anticipates," "estimates,"
"expects," "projects," "may," "will," "intends," "plans," "believes," "should"
and similar expressions may identify forward-looking statements and such
forward-looking statements are made based upon management's current
expectations, assumptions and beliefs as of this date concerning future
developments and their potential effect upon Unisys. There can be no assurance
that future developments will be in accordance with management's expectations,
assumptions and beliefs or that the effect of future developments on Unisys
will be those anticipated by management. Forward-looking statements in this
release and the accompanying presentation include, but are not limited to, any
projections or expectations of revenue growth, margin expansion, achievement
of operational efficiencies and savings, future growth of our Next-Gen
solutions, TCV and New Business TCV, backlog, pipeline, book-to-bill,
full-year 2024 revenue growth and profitability guidance, including constant
currency revenue, Ex-L&S revenue growth, L&S revenue, non-GAAP operating
profit margin and the assumptions and other expectations made in connection
with our full-year 2024 financial guidance, our pension liability and
statements regarding future economic conditions or performance.
Additional information and factors that could cause actual results to differ
materially from Unisys' expectations are contained in Unisys' filings with the
U.S. Securities and Exchange Commission (SEC), including Unisys' Annual
Reports on Form 10-K and subsequent Quarterly Reports on Form 10-Q, recent
Current Reports on Form 8-K, and other SEC filings, which are available at the
SEC's web site, http://www.sec.gov. Information included in this release is
representative as of the date of this release only and while Unisys
periodically reassesses material trends and uncertainties affecting Unisys'
results of operations and financial condition in connection with its
preparation of management's discussion and analysis of results of operations
and financial condition contained in its Quarterly and Annual Reports filed
with the SEC, Unisys does not, by including this statement, assume any
obligation to review or revise any particular forward-looking statement
referenced herein in light of future events.
Non-GAAP Information
This release includes certain non-GAAP financial measures that exclude certain
items such as postretirement expense; certain legal and other matters related
to professional services and legal fees, including legal defense costs,
associated with certain legal proceedings; environmental matters related to
previously disposed businesses; and cost-reduction activities and other
expenses that the company believes are not indicative of its ongoing
operations, as they may be unusual or non-recurring. The inclusion of such
items in financial measures can make the company's profitability and liquidity
results difficult to compare to prior periods or anticipated future periods
and can distort the visibility of trends associated with the company's ongoing
performance. Management also believes that non-GAAP measures are useful to
investors because they provide supplemental information about the company's
financial performance and liquidity, as well as greater transparency into
management's view and assessment of the company's ongoing operating
performance.
Non-GAAP financial measures are often provided and utilized by the company's
management, analysts, and investors to enhance comparability of year-over-year
results and to isolate in some instances the impact of software license
renewals, which tend to be lumpy, and related support services in order to
evaluate the company's business outside of these areas. These items are
uncertain, depend on various factors, and could have a material impact on the
company's GAAP results for the applicable period. These measures should not be
relied upon as substitutes for, or considered in isolation from, measures
calculated in accordance with U.S. GAAP. A reconciliation of these non-GAAP
financial measures to the most directly comparable financial measures
calculated and reported in accordance with GAAP can be found below except for
financial guidance and other forward-looking information since such a
reconciliation is not practicable without unreasonable efforts as the company
is unable to reasonably forecast certain amounts that are necessary for such
reconciliation. This information has been provided pursuant to the
requirements of SEC Regulation G.
About Unisys
Unisys is a global technology solutions company that powers breakthroughs for
the world's leading organizations. Our solutions – cloud, data and AI,
digital workplace, logistics and enterprise computing – help our clients
challenge the status quo and unlock their full potential. To learn how we have
been helping clients push what's possible for 150 years, visit unisys.com and
follow us on LinkedIn.
RELEASE NO.: 0221/9939
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,
2023 2022 2023 2022
Revenue
Services $ 429.8 $ 409.7 $ 1,665.9 $ 1,597.3
Technology 127.8 147.3 349.5 382.6
557.6 557.0 2,015.4 1,979.9
Costs and expenses
Cost of revenue:
Services 318.8 324.3 1,282.4 1,285.9
Technology 57.6 42.9 181.7 164.4
376.4 367.2 1,464.1 1,450.3
Selling, general and administrative 129.0 132.9 450.3 453.2
Research and development 8.2 6.9 24.1 24.2
513.6 507.0 1,938.5 1,927.7
Operating income 44.0 50.0 76.9 52.2
Interest expense 7.9 7.8 30.8 32.4
Other (expense), net (176.7) (16.2) (393.9) (82.4)
(Loss) earnings before income taxes (140.6) 26.0 (347.8) (62.6)
Provision for income taxes 23.6 17.2 79.3 42.3
Consolidated net (loss) earnings (164.2) 8.8 (427.1) (104.9)
Net income attributable to noncontrolling interests 1.1 0.3 3.6 1.1
Net (loss) income attributable to Unisys Corporation $ (165.3) $ 8.5 $ (430.7) $ (106.0)
(Loss) earnings per share attributable to Unisys Corporation
Basic $ (2.42) $ 0.13 $ (6.31) $ (1.57)
Diluted $ (2.42) $ 0.12 $ (6.31) $ (1.57)
UNISYS CORPORATION
SEGMENT RESULTS
(Unaudited)
(Millions)
Total DWS CA&I ECS Other
Three Months Ended December 31, 2023
Revenue $ 557.6 $ 139.2 $ 138.9 $ 203.0 $ 76.5
Gross profit percent 32.5 % 15.3 % 16.3 % 67.4 %
Three Months Ended December 31, 2022
Revenue $ 557.0 $ 127.8 $ 138.8 $ 225.6 $ 64.8
Gross profit percent 34.1 % 15.1 % 19.0 % 73.3 %
Total DWS CA&I ECS Other
Year Ended December 31, 2023
Revenue $ 2,015.4 $ 546.1 $ 531.0 $ 648.0 $ 290.3
Gross profit percent 27.4 % 14.0 % 15.4 % 61.2 %
Year Ended December 31, 2022
Revenue $ 1,979.9 $ 509.9 $ 520.3 $ 669.7 $ 280.0
Gross profit percent 26.7 % 14.0 % 9.1 % 64.5 %
UNISYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Millions)
December 31, December 31,
2023 2022
Assets
Current assets:
Cash and cash equivalents $ 387.7 $ 391.8
Accounts receivable, net 454.5 402.5
Contract assets 11.7 28.9
Inventories 15.3 14.9
Prepaid expenses and other current assets 101.8 92.3
Total current assets 971.0 930.4
Properties 396.4 410.8
Less – Accumulated depreciation and amortization 332.1 334.9
Properties, net 64.3 75.9
Outsourcing assets, net 31.6 66.4
Marketable software, net 166.2 165.1
Operating lease right-of-use assets 35.4 42.5
Prepaid postretirement assets 38.0 119.5
Deferred income taxes 114.0 118.6
Goodwill 287.4 287.1
Intangible assets, net 42.7 52.4
Restricted cash 9.0 10.9
Assets held-for-sale 4.9 6.4
Other long-term assets 200.9 190.4
Total assets $ 1,965.4 $ 2,065.6
Total liabilities and (deficit) equity
Current liabilities:
Current maturities of long-term debt $ 13.0 $ 17.4
Accounts payable 130.9 160.8
Deferred revenue 198.6 200.7
Other accrued liabilities 308.4 271.6
Total current liabilities 650.9 650.5
Long-term debt 491.2 495.7
Long-term postretirement liabilities 787.7 714.6
Long-term deferred revenue 104.4 122.3
Long-term operating lease liabilities 25.6 29.7
Other long-term liabilities 44.0 31.0
Commitments and contingencies
Total Unisys Corporation stockholders' deficit (151.8) (14.7)
Noncontrolling interests 13.4 36.5
Total (deficit) equity (138.4) 21.8
Total liabilities and (deficit) equity $ 1,965.4 $ 2,065.6
UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Millions)
Year Ended
December 31,
2023 2022
Cash flows from operating activities
Consolidated net loss $ (427.1) $ (104.9)
Adjustments to reconcile consolidated net loss to net cash provided by operating activities:
Foreign currency losses 0.2 6.8
Non-cash interest expense 1.2 1.3
Employee stock compensation 17.2 20.0
Depreciation and amortization of properties 29.1 50.2
Depreciation and amortization of outsourcing assets 50.3 64.5
Amortization of marketable software 49.7 58.7
Amortization of intangible assets 9.7 10.1
Other non-cash operating activities (0.2) 0.3
Loss on disposal of capital assets 6.0 6.6
Postretirement contributions (48.0) (43.7)
Postretirement expense 388.5 45.3
Deferred income taxes, net 24.5 (8.3)
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Receivables, net and contract assets 4.2 15.5
Inventories — (8.0)
Other assets (25.5) (2.6)
Accounts payable and current liabilities (20.9) (103.8)
Other liabilities 15.3 4.7
Net cash provided by operating activities 74.2 12.7
Cash flows from investing activities
Proceeds from investments 2,751.6 3,336.1
Purchases of investments (2,740.4) (3,380.4)
Capital additions of properties (21.3) (31.0)
Capital additions of outsourcing assets (11.4) (8.6)
Investment in marketable software (46.0) (46.3)
Purchases of businesses, net of cash acquired (1.2) (0.3)
Other (0.9) (0.9)
Net cash used for investing activities (69.6) (131.4)
Cash flows from financing activities
Payments of long-term debt (16.9) (17.8)
Other (0.4) (3.8)
Net cash used for financing activities (17.3) (21.6)
Effect of exchange rate changes on cash, cash equivalents and restricted cash 6.7 (17.6)
Decrease in cash, cash equivalents and restricted cash (6.0) (157.9)
Cash, cash equivalents and restricted cash, beginning of period 402.7 560.6
Cash, cash equivalents and restricted cash, end of period $ 396.7 $ 402.7
UNISYS CORPORATION
RECONCILIATIONS OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited)
(Millions, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2023 2022 2023 2022
Net (loss) income attributable to Unisys Corporation $ (165.3) $ 8.5 $ (430.7) $ (106.0)
Postretirement expense pretax 174.4 11.2 388.5 45.3
tax (0.1) 0.1 (0.7) 0.5
net of tax 174.5 11.1 389.2 44.8
Certain legal matters pretax 11.9 6.8 35.7 16.0
tax — — — —
net of tax 11.9 6.8 35.7 16.0
Environmental matters pretax 7.0 6.6 24.7 32.4
tax — — — —
net of tax 7.0 6.6 24.7 32.4
Cost reduction and other expenses pretax 7.6 53.2 23.8 91.1
tax 0.3 3.4 1.0 3.5
net of tax 7.3 49.8 22.8 87.6
Non-GAAP net income attributable to Unisys Corporation $ 35.4 $ 82.8 $ 41.7 $ 74.8
Weighted average shares (thousands) 68,402 67,793 68,254 67,665
Plus incremental shares from assumed conversion:
Employee stock plans 1,365 331 945 481
Non-GAAP adjusted weighted average shares 69,767 68,124 69,199 68,146
Diluted earnings (loss) per share
GAAP basis
Net (loss) income attributable to Unisys Corporation $ (165.3) $ 8.5 $ (430.7) $ (106.0)
Divided by weighted average shares 68,402 68,124 68,254 67,665
Diluted (loss) earnings per share $ (2.42) $ 0.12 $ (6.31) $ (1.57)
Non-GAAP basis
Non-GAAP net income attributable to Unisys Corporation for diluted $ 35.4 $ 82.8 $ 41.7 $ 74.8
earnings per share
Divided by Non-GAAP adjusted weighted average shares 69,767 68,124 69,199 68,146
Non-GAAP diluted earnings per share $ 0.51 $ 1.22 $ 0.60 $ 1.10
UNISYS CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
FREE CASH FLOW
Three Months Ended Year Ended
December 31, December 31,
2023 2022 2023 2022
Cash provided by operations $ 23.0 $ 34.9 $ 74.2 $ 12.7
Additions to marketable software (13.1) (11.1) (46.0) (46.3)
Additions to properties (5.9) (9.5) (21.3) (31.0)
Additions to outsourcing assets — (0.5) (11.4) (8.6)
Free cash flow 4.0 13.8 (4.5) (73.2)
Postretirement funding 6.7 9.8 48.0 43.7
Pre-pension free cash flow 10.7 23.6 43.5 (29.5)
Certain legal payments 9.7 — 30.2 5.5
Environmental matters payments 7.2 11.2 21.8 28.1
Cost reduction and other payments 3.3 4.5 25.0 22.9
Adjusted free cash flow $ 30.9 $ 39.3 $ 120.5 $ 27.0
UNISYS CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
EBITDA
Three Months Ended Year Ended
December 31, December 31,
2023 2022 2023 2022
Net (loss) income attributable to Unisys Corporation $ (165.3) $ 8.5 $ (430.7) $ (106.0)
Net income attributable to noncontrolling interests 1.1 0.3 3.6 1.1
Interest expense, net of interest income of $6.3, $3.7, $26.3, $12.4 1.6 4.1 4.5 20.0
respectively (1)
Provision for income taxes 23.6 17.2 79.3 42.3
Depreciation 21.0 36.6 79.4 114.7
Amortization 14.4 18.4 59.4 68.8
EBITDA $ (103.6) $ 85.1 $ (204.5) $ 140.9
Postretirement expense $ 174.4 $ 11.2 $ 388.5 $ 45.3
Certain legal matters (2) 11.9 6.8 35.7 16.0
Environmental matters (1) 7.0 6.6 24.7 32.4
Cost reduction and other expenses (3) 4.5 30.2 13.5 55.4
Non-cash share based expense 4.1 4.3 16.6 19.0
Other expense, net adjustment (4) 2.1 4.5 11.4 16.8
Adjusted EBITDA $ 100.4 $ 148.7 $ 285.9 $ 325.8
(1) Included in other (expense), net on the consolidated statements of income (loss)
(2) Included in selling, general and administrative expenses and other (expense), net within the consolidated statements of income (loss)
(3) Reduced for depreciation and amortization included above
(4) Other expense, net as reported on the consolidated statements of income (loss) less postretirement expense, interest income and items
included in environmental matters, cost reduction and other expenses
Three Months Ended Year Ended
December 31, December 31,
2023 2022 2023 2022
Revenue $ 557.6 $ 557.0 $ 2,015.4 $ 1,979.9
Net (loss) earnings attributable to Unisys Corporation as a percentage of (29.6) % 1.5 % (21.4) % (5.4) %
revenue
Non-GAAP net income attributable to Unisys Corporation as a 6.3 % 14.9 % 2.1 % 3.8 %
percentage of revenue
Adjusted EBITDA as a percentage of revenue 18.0 % 26.7 % 14.2 % 16.5 %
UNISYS CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
OPERATING PROFIT
Three Months Ended Year Ended
December 31, December 31,
2023 2022 2023 2022
Operating profit $ 44.0 $ 50.0 $ 76.9 $ 52.2
Certain legal matters (1) 11.4 6.8 35.2 16.0
Cost reduction and other expenses (2) 8.4 55.1 27.4 88.7
Postretirement expense (1) 0.2 0.5 1.3 2.1
Non-GAAP operating profit $ 64.0 $ 112.4 $ 140.8 $ 159.0
Revenue $ 557.6 $ 557.0 $ 2,015.4 $ 1,979.9
Operating profit percent 7.9 % 9.0 % 3.8 % 2.6 %
Non-GAAP operating profit percent 11.5 % 20.2 % 7.0 % 8.0 %
(1) Included in selling, general and administrative expenses within the consolidated statements of income (loss)
(2) Included in cost of revenue, selling, general and administrative and research and development on the consolidated statements of income
(loss)
EXCLUDING LICENSE AND SUPPORT (EX-L&S) REVENUE AND GROSS PROFIT
Three Months Ended Year Ended
December 31, December 31,
2023 2022 2023 2022
Revenue $ 557.6 $ 557.0 $ 2,015.4 $ 1,979.9
L&S revenue 144.3 170.1 429.1 468.0
Ex-L&S Non-GAAP revenue $ 413.3 $ 386.9 $ 1,586.3 $ 1,511.9
Gross profit $ 181.2 $ 189.8 $ 551.3 $ 529.6
L&S gross profit 112.8 144.1 311.3 360.8
Ex-L&S Non-GAAP gross profit $ 68.4 $ 45.7 $ 240.0 $ 168.8
Gross profit percent 32.5 % 34.1 % 27.4 % 26.7 %
Ex-L&S Non-GAAP gross profit percent 16.5 % 11.8 % 15.1 % 11.2 %
CONTACT: For Investors: Michaela Pewarski, Unisys, +1
215-274-1254Investor@unisys.com; For Press: Patricia Gonzalez, Unisys, +1
817-846-7662, Patricia.Gonzalez@unisys.com
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