TIDMUSY
Unisys Announces 1Q19 Results; Services Revenue Growth Continues with Highest
Quarterly Growth Since 2003; Company Raises Full-Year Guidance for Non-GAAP
Adjusted Revenue and Reaffirms Guidance for Non-GAAP Operating Profit Margin
and Adjusted EBITDA Margin
BLUE BELL, Pa., May 2, 2019 /PRNewswire/ --
* Services revenue grew 7.7% year over year (11.7% on a constant-currency(3)
basis); Services non-GAAP adjusted revenue(5) grew 7.3% year over year, the
highest quarterly rate since 2003
* Total 1Q19 revenue of $695.8 million versus $708.4 million in prior-year
period (reflective of the additional $53 million of revenue recorded upon
adoption of ASC 606 in 1Q18), up 2.3% on a constant-currency basis; Total
non-GAAP adjusted revenue grew 5.9% year over year, the highest quarterly
rate since 2014
* Services backlog(4) was stable year over year at $4.7 billion
* Company raises full-year guidance for non-GAAP adjusted revenue from
+1%-+4% year-over-year growth to +2-+5% year-over-year growth and reaffirms
guidance for non-GAAP operating profit margin and adjusted EBITDA margin
Unisys Corporation (NYSE: UIS) today reported first-quarter 2019 financial
results, raised full-year guidance for non-GAAP adjusted revenue and reaffirmed
full-year guidance for non-GAAP operating profit margin and adjusted EBITDA
margin. "We are excited to see top-line momentum continue, with another quarter
of non-GAAP adjusted revenue growth, including the highest quarterly growth we
have seen in Services since 2003," said Unisys Chairman and CEO Peter A.
Altabef. "We are maintaining our client-centric focus and delivering
transformative, secure solutions, and we were pleased to see continued traction
with our strategy in the first quarter."
Summary of First-Quarter 2019 Business Results
Company:
First-quarter 2019 revenue was $695.8 million versus $708.4 million in
prior-year period (reflective of the additional $53 million of revenue recorded
upon adoption of ASC 606, the new revenue recognition rules, in the first
quarter of 2018), up 2.3% year over year on a constant-currency basis. Non-GAAP
adjusted revenue grew 5.9% to $693.8 million.
Operating profit margin in the first quarter 2019 was 6.2%. The non-recurring
adjustment required by the adoption of ASC 606 increased operating profit by
$53 million and operating profit margin by 700 basis points in the prior-year
period, with overall operating profit margin down 820 basis points year over
year as reported. Non-GAAP operating profit(6) margin was down 80 basis points
year over year to 6.4%. This more modest decline was due largely to the impact
of new business within Services. As seen in recent quarters, new Services
contracts can impact margins, as costs are incurred ahead of revenue reaching
its run rate, and this was the case during the first quarter 2019.
Net loss for the first quarter 2019 was $19.4 million, versus net income of
$40.6 million in the prior-year period. Diluted loss per share was $0.38,
versus diluted earnings per share of $0.62 in the prior-year period. Prior-year
period net income included $47.7 million, or $0.76 per diluted share, related
to the initial adoption of ASC 606. Non-GAAP diluted earnings per share(12) was
$0.15 versus $0.19 in the prior-year period, driven by similar factors as
non-GAAP operating income.
Adjusted EBITDA(11) for the first quarter 2019 was $82.4 million, versus $92.9
million in the prior-year period, driven largely by the same new business that
impacted operating profit. Net income margin was (2.8)% versus 5.7% in the
prior-year period, largely driven by the initial impact of the adoption of ASC
606, which contributed 680 basis points to net income margin in the prior-year
period. Adjusted EBITDA margin was 11.9%, versus 14.2% in the prior-year
period, driven by similar factors that impacted operating income. The
year-over-year delta in adjusted EBITDA is slightly greater than that for
non-GAAP operating income due to lower depreciation and amortization in the
first quarter 2019 as compared to the prior-year period.
First-quarter 2019 cash flow used in operations was $70.4 million versus $50.2
million in the prior-year period, with the year-over-year decline largely
driven by discount-related prepayments of start-up costs associated with a
large new public sector deal and the timing of collections related to several
large Technology and U.S. Federal contracts signed late in the quarter.
Adjusted free cash flow(14) was $(95.9) million in the first quarter 2019,
versus $(50.8) million in the prior-year period. The year-over-year decline in
adjusted free cash flow was driven by the same factors that impacted operating
cash flow, as well as increased capex from new business.
In the first quarter 2019, the company had a lighter renewal schedule than in
the prior-year period. Additionally, in the first quarter 2018, the company
signed its largest contract in a decade. These two factors resulted in Total
Contract Value(1) (or "TCV") in the first quarter 2019 being down 30% year over
year. However, at $989 million, TCV was the highest quarterly amount since that
first quarter of 2018. Additionally, new business TCV, which included the
benefit of several large U.S. Federal deals, was up 3% year over year, even
with the benefit of the large contract in the first quarter of 2018.
Services:
First-quarter 2019 Services revenue grew 7.7% year over year (or 11.7% in
constant-currency) to $612.1 million. Services non-GAAP adjusted revenue grew
7.3% year over year to $610.1 million, marking the highest level of growth
since 2003 for this segment. Services backlog was stable year over year to end
the quarter at $4.7 billion. As seen in recent quarters, new Services contracts
can impact margins, as costs are incurred ahead of revenue reaching its run
rate, and this was the case during the first quarter 2019 with an impact of 180
basis points on Services gross profit margin. As a result, Services gross
profit margin was 15.4%, down 120 basis points year over year, and Services
operating profit margin was 2.5%, down 50 basis points year over year. Non-GAAP
adjusted Services gross profit(7) margin was 15.2%, down 140 basis points year
over year (impacted by the previously-noted 180-basis-point impact of new
business), and non-GAAP adjusted Services operating profit(8) margin was 2.2%,
down 80 basis points year over year.
Technology:
In the first quarter of 2018, the company recorded an additional $53 million of
Technology revenue upon the adoption of ASC 606, which impacted the GAAP
year-over-year compares in the first quarter 2019 for Technology revenue and
margins. Technology revenue was $83.7 million in the first quarter 2019 versus
$139.9 million in the prior-year period (down 40.2%, or 36.9% in constant
currency). Non-GAAP adjusted Technology revenue for the first quarter 2019 was
also down year over year, as expected due to the ClearPath Forward renewal
schedule, but down a modest 3.7% year over year. Technology gross profit margin
was 58.1% in the first quarter 2019 versus 68.9% in the prior-year period,
while Technology operating profit margin was 34.1% versus 54.7% in the
prior-year period. Non-GAAP adjusted Technology gross profit(9) margin for the
first quarter 2019 increased 620 basis points year over year from 51.9% to
58.1%. Non-GAAP adjusted Technology operating profit(10) margin increased 420
basis points year over year from 29.9% to 34.1%. Non-GAAP adjusted Technology
operating profit dollars were up 1.4% year over year, despite the modest
decline in non-GAAP adjusted Technology revenue, helped by a higher mix of
software versus the prior-year period.
Select First-Quarter Contract Signings:
In the first quarter, the company entered into several key contracts in each of
its sectors including the following:
* U.S. Federal: Unisys was selected by the U.S. Air Force for an engagement
to provide a package of Digital Workplace Services through which the Air
Force will securely manage, maintain and monitor its end-user desktop,
laptop and mobile devices. To help the Air Force consolidate multiple
service desks with varied tool sets into a single entity with complete
oversight of services, Unisys will stand up a cloud-based ITSM solution and
end-user device management solution as well as develop and roll out a
self-service portal and call-management solution. Unisys also will automate
security to ensure end-user devices comply with security rules before they
can connect to Air Force networks.
* Public: A large U.S. state government agency expanded the scope of its
existing work with Unisys to include additional cloud migration work, as
part of an initiative to modernize services to citizens at a lower cost.
This work is expected to improve the reliability, cybersecurity and
cost-effectiveness of key state administrative operations by applying
state-of-art IT practices, while shifting to a consumption-based pricing
model to reduce capital costs.
* Commercial: A Unisys Stealth® reseller signed a contract with a leading
U.S.-based retailer to provide Unisys Stealth security software, to be used
to reduce their attack surface considerably while also helping them comply
with various regulatory requirements such as PCI and GDPR, across more than
11,000 locations worldwide.
* Financial Services: Unisys renewed and expanded its contract with Banco
Regional de Desenvolvimento do Extremo Sul, where the client will move to a
new ClearPath Forward® solution. This new environment will enable the bank
to process loans faster and give a better experience to its customers.
Conference Call
Unisys will hold a conference call today at 5:00 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 (U.S. 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 - In 2018 and 2019, the company's non-GAAP
results reflect adjustments to exclude certain revenue. In 2018, this includes
revenue from software license extensions and renewals which were contracted for
in 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 $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 was 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.
Additionally, the company's non-GAAP results include adjustments to exclude
certain revenue and related profit relating to reimbursements from the
company's check-processing JV partners for restructuring expenses included as
part of the company's restructuring program.
(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. During 2018 and 2019, the company included the non-GAAP
adjustments discussed in (5) herein.
(7) Non-GAAP adjusted Services gross profit - During 2018 and 2019, the
company included the adjustments discussed in (5) herein.
(8) Non-GAAP adjusted Services operating profit - During 2018 and 2019, the
company included the adjustments discussed in (5) herein.
(9) Non-GAAP adjusted Technology gross profit - In the first quarter of 2018,
the company included the ASC 606 adjustment discussed in (5) herein.
(10) Non-GAAP adjusted Technology operating profit - In the first quarter of
2018, the company included the ASC 606 adjustment discussed in (5) herein.
(11) 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. During 2018 and 2019, the
company included the adjustments discussed in (5) herein.
(12) 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. During 2018 and
2019, the company included the adjustments discussed in (5) herein.
(13) 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.
(14) Adjusted free cash flow - Because inclusion of the company's
post-retirement contributions 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 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 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; the potential adverse effects of aggressive competition in
the information services and technology marketplace; our significant pension
obligations and required cash contributions and requirements to make additional
significant cash contributions to our defined benefit pension plans;
cybersecurity breaches could result in significant costs and could harm our
business and reputation; the potential adverse effects of a U.S. Federal
government shutdown; 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; the risks of doing business
internationally when a significant portion of our revenue is derived from
international operations; our ability to access financing markets; 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; our ability
to attract, motivate and retain experienced and knowledgeable personnel in key
positions; 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 business and
financial risk in implementing future acquisitions or dispositions; 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 plans; 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; the adverse effects of global
economic conditions, acts of war, terrorism or natural disasters 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.: 0502/9676
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
March 31,
2019 2018
Revenue
Services $ $
612.1 568.5
Technology 83.7 139.9
695.8 708.4
Costs and expenses
Cost of revenue:
Services 511.9 470.9
Technology 34.0 36.3
545.9 507.2
Selling, general and administrative 98.0 90.9
Research and development 9.0 8.5
652.9 606.6
Operating profit 42.9 101.8
Interest expense 15.5 16.6
Other income (expense), net (30.4) (22.6)
Income (loss) before income taxes (3.0) 62.6
Provision for income taxes 13.8 20.9
Consolidated net income (loss) (16.8) 41.7
Net income attributable to noncontrolling interests 2.6 1.1
Net income (loss) attributable to Unisys Corporation $ $
common shareholders (19.4) 40.6
Earnings (loss) per share attributable to Unisys
Corporation
Basic $ $
(0.38) 0.80
Diluted $ $
(0.38) 0.62
Shares used in the per share computations (in
thousands):
Basic 51,418 50,748
Diluted 51,418 72,943
UNISYS CORPORATION
SEGMENT RESULTS
(Unaudited)
(Millions)
Total Eliminations Services Technology
Three Months Ended March
31, 2019
Customer revenue $ $ $ $
695.8 - 612.1 83.7
Intersegment - (2.4) - 2.4
Total revenue $ $ $ $
695.8 (2.4) 612.1 86.1
Gross profit percent 21.5 % 15.4 % 58.1 %
Operating profit percent 6.2 % 2.5 % 34.1 %
Three Months Ended March
31, 2018
Customer revenue $ $ $ $
708.4 - 568.5 139.9
Intersegment - (10.0) - 10.0
Total revenue $ $ $ $
708.4 (10.0) 568.5 149.9
Gross profit percent 28.4 % 16.6 % 68.9 %
Operating profit percent 14.4 % 3.0 % 54.7 %
UNISYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Millions)
March 31, 2019 December 31,
2018
Assets
Current assets:
Cash and cash equivalents $ $
504.6 605.0
Accounts receivable, net 522.7 509.2
Contract assets 30.3 29.7
Inventories:
Parts and finished equipment 12.3 14.0
Work in process and materials 12.6 13.3
Prepaid expenses and other current 124.8 130.2
assets
Total current assets 1,207.3 1,301.4
Properties 806.4 800.2
Less-Accumulated depreciation and 683.8 678.9
amortization
Properties, net 122.6 121.3
Outsourcing assets, net 216.2 216.4
Marketable software, net 170.7 162.1
Operating lease right-of-use assets 115.5 -
Prepaid postretirement assets 151.4 147.6
Deferred income taxes 111.0 109.3
Goodwill 177.6 177.8
Restricted cash 12.2 19.1
Other long-term assets 200.0 202.6
Total assets $ $
2,484.5 2,457.6
Liabilities and deficit
Current liabilities:
Current maturities of long-term-debt $ $
7.3 10.0
Accounts payable 213.8 268.9
Deferred revenue 292.2 294.4
Other accrued liabilities 348.6 350.0
Total current liabilities 861.9 923.3
Long-term debt 667.1 642.8
Long-term postretirement liabilities 1,927.2 1,956.5
Long-term deferred revenue 158.1 157.2
Long-term operating lease liabilities 97.2 -
Other long-term liabilities 55.5 77.4
Commitments and contingencies
Total deficit (1,282.5) (1,299.6)
Total liabilities and deficit 2,484.5 2,457.6
UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Millions)
Three Months Ended
March 31,
2019 2018
Cash flows from operating activities
Consolidated net income (loss) $ $
(16.8) 41.7
Adjustments to reconcile consolidated net income (loss) to
net cash used for operating
activities:
Foreign currency transaction losses 4.8 3.3
Non-cash interest expense 2.7 2.6
Employee stock compensation 4.7 4.0
Depreciation and amortization of properties 9.2 11.2
Depreciation and amortization of outsourcing assets 15.8 16.1
Amortization of marketable software 9.5 14.7
Other non-cash operating activities (0.6) (0.9)
Loss on disposal of capital assets 1.2 0.2
Postretirement contributions (23.1) (30.9)
Postretirement expense 23.5 19.3
(Increase) decrease in deferred income taxes, net (3.1) 6.0
Changes in operating assets and liabilities:
Receivables, net 5.5 (28.0)
Inventories 2.6 0.8
Accounts payable and other accrued liabilities (121.0) (130.1)
Other liabilities 14.8 21.2
Other assets (0.1) (1.4)
Net cash used for operating activities (70.4) (50.2)
Cash flows from investing activities
Proceeds from investments 893.9 1,222.7
Purchases of investments (887.2) (1,208.7)
Investment in marketable software (18.0) (19.0)
Capital additions of properties (10.7) (5.1)
Capital additions of outsourcing assets (29.4) (24.4)
Net proceeds from sale of properties (0.1) -
Other (0.4) (0.4)
Net cash used for investing activities (51.9) (34.9)
Cash flows from financing activities
Proceeds from issuance of long-term debt 27.7 -
Payments of long-term debt (8.7) (0.7)
Other (4.4) (2.1)
Net cash provided by (used for) financing activities 14.6 (2.8)
Effect of exchange rate changes on cash, cash equivalents 0.4 6.8
and restricted cash
Decrease in cash, cash equivalents and restricted cash (107.3) (81.1)
Cash, cash equivalents and restricted cash, beginning of 624.1 764.1
period
Cash, cash equivalents and restricted cash, end of period $ $
516.8 683.0
UNISYS CORPORATION
RECONCILIATIONS OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited)
(Millions, except per share data)
Three Months
Ended March 31,
2019 2018
GAAP net income (loss) attributable to Unisys $ $
Corporation common shareholders (19.4) 40.6
Topic 606 adjustment: pretax - (53.0)
tax - (5.3)
net of tax - (47.7)
Postretirement expense: pretax 23.5 19.3
tax 0.1 0.3
net of tax 23.6 19.6
Cost reduction and other pretax 3.6 (2.9)
expense:
tax 0.7 (0.1)
net of tax 2.9 (2.8)
minority interest 0.7 -
net of minority 3.6 (2.8)
interest
Non-GAAP net income attributable to Unisys Corporation 7.8 9.7
common shareholders
Add interest expense on convertible notes - -
Non-GAAP net income attributable to Unisys Corporation $ $
for diluted earnings per 7.8 9.7
share
Weighted average shares (thousands) 51,418 50,748
Plus incremental shares from assumed conversion:
Employee stock plans 516 327
Convertible notes - -
Non-GAAP adjusted weighted average shares 51,934 51,075
Diluted earnings (loss) per share
GAAP basis
GAAP net income (loss) attributable to Unisys $ $
Corporation for diluted earnings per share (19.4) 45.4
Divided by adjusted weighted average shares 51,418 72,943
GAAP diluted earnings (loss) per share $ $
(0.38) 0.62
Non-GAAP basis
Non-GAAP net income attributable to Unisys Corporation $ $
for diluted earnings per share 7.8 9.7
Divided by Non-GAAP adjusted weighted average shares 51,934 51,075
Non-GAAP diluted earnings per share $ $
0.15 0.19
UNISYS CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
FREE CASH FLOW
Three Months
Ended March 31,
2019 2018
Cash used for operations $ (70.4) $ (50.2)
Additions to marketable software (18.0) (19.0)
Additions to properties (10.7) (5.1)
Additions to outsourcing assets (29.4) (24.4)
Free cash flow (128.5) (98.7)
Postretirement funding 23.1 30.9
Cost reduction and other payments, net of 9.5 17.0
reimbursements
Adjusted free cash flow $ (95.9) $ (50.8)
UNISYS CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
EBITDA
Three Months
Ended March 31,
2019 2018
Net income (loss) attributable to Unisys $ (19.4) $ 40.6
Corporation common shareholders
Net income attributable to noncontrolling 2.6 1.1
interests
Interest expense, net of interest income of 12.6 13.4
$2.9, $3.2 respectively*
Provision for income taxes 13.8 20.9
Depreciation 25.0 27.3
Amortization 9.5 14.7
EBITDA $ 44.1 $ 118.0
Topic 606 adjustment $ - $ (53.0)
Postretirement expense 23.5 19.3
Cost reduction and other expense** 2.5 (2.9)
Non-cash share based expense 4.7 4.0
Other (income) expense adjustment*** 7.6 7.5
Adjusted EBITDA $ 82.4 $ 92.9
*Included in other (income) expense, net on the consolidated statements of
income
**Reduced for depreciation and amortization included above
***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
Three Months
Ended March 31,
2019 2018
Revenue $ 695.8 $ 708.4
Non-GAAP revenue $ 693.8 $ 655.4
Net income (loss) as a percentage of revenue (2.8)% 5.7 %
Adjusted EBITDA as a percentage of Non-GAAP 11.9 % 14.2 %
revenue
UNISYS CORPORATION
RECONCILIATIONS OF GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING
(Unaudited)
(Millions)
Three Months
Services Segment Ended March 31,
2019 2018
GAAP total revenue $ 612.1 $ 568.5
Restructuring reimbursement (2.0) -
Non-GAAP revenue $ 610.1 $ 568.5
GAAP gross margin $ 94.5 $ 94.1
Restructuring reimbursement (2.0) -
Non-GAAP gross margin $ 92.5 $ 94.1
GAAP operating profit $ 15.2 $ 17.1
Restructuring reimbursement (2.0) -
Non-GAAP operating profit $ 13.2 $ 17.1
GAAP gross margin % 15.4% 16.6%
Non-GAAP gross margin % 15.2% 16.6%
GAAP operating profit % 2.5% 3.0%
Non-GAAP operating profit % 2.2% 3.0%
Three Months
Technology Segment Ended March 31,
2019 2018
GAAP total revenue $ 86.1 $ 149.9
Topic 606 adjustment - (53.0)
Non-GAAP revenue $ 86.1 $ 96.9
GAAP gross margin $ 50.0 $ 103.3
Topic 606 adjustment - (53.0)
Non-GAAP gross margin $ 50.0 $ 50.3
GAAP operating profit $ 29.4 $ 82.0
Topic 606 adjustment - (53.0)
Non-GAAP operating profit $ 29.4 $ 29.0
GAAP gross margin % 58.1% 68.9%
Non-GAAP gross margin % 58.1% 51.9%
GAAP operating profit % 34.1% 54.7%
Non-GAAP operating profit % 34.1% 29.9%
UNISYS CORPORATION
RECONCILIATIONS OF GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING
(Unaudited)
(Millions)
Three Months
Total Unisys Ended March 31,
2019 2018
GAAP total revenue $ 695.8 $ 708.4
Topic 606 adjustment - (53.0)
Restructuring reimbursement (2.0) -
Non-GAAP revenue $ 693.8 $ 655.4
GAAP gross margin $ 149.9 $ 201.2
Topic 606 adjustment - (53.0)
Restructuring reimbursement (2.0) -
Cost reduction expense (3.7) (3.0)
Non-GAAP gross margin $ 144.2 $ 145.2
GAAP operating profit $ 42.9 $ 101.8
Topic 606 adjustment - (53.0)
Restructuring reimbursement (2.0) -
Postretirement expense 0.8 1.0
Cost reduction expense 2.6 (2.9)
Non-GAAP operating profit $ 44.3 $ 46.9
GAAP gross margin % 21.5% 28.4%
Non-GAAP gross margin % 20.8% 22.2%
GAAP operating profit % 6.2% 14.4%
Non-GAAP operating profit % 6.4% 7.2%
CONTACT: Investors: Courtney Holben, Unisys, 215-986-3379,
courtney.holben@unisys.com; Media: John Clendening, Unisys, 214-403-1981,
john.clendening@unisys.com
END
(END) Dow Jones Newswires
May 03, 2019 08:28 ET (12:28 GMT)
Grafico Azioni Unisys (LSE:USY)
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