TIDMUSY
Unisys Announces Full-Year and 4Q19 Results; Achieves All Guided Metrics
BLUE BELL, Pa., Feb. 25, 2020 --
* Total 2019 revenue grew 4.4% year over year (7.0% on a constant-currency(1)
basis)
+ Total 2019 non-GAAP adjusted revenue(3) grew 6.1% year over year,
representing the second-consecutive year of year-over-year growth and
the highest annual growth since 1998
* 2019 operating profit margin of 8.1% versus 10.1% in prior-year period
(reflective of 180 basis points of additional operating profit margin that
resulted from the revenue recorded upon adoption of ASC 606 in 1Q18)
+ 2019 non-GAAP operating profit(4) margin expanded 10 basis points year
over year to 9.0%
* 2019 Services operating profit margin expanded 140 basis points year over
year to 4.2%
+ 2019 non-GAAP adjusted Services operating profit(6) margin expanded 120
basis points year over year to 3.6%
* 2019 operating cash flow grew $50.0 million year over year to $123.9
million
+ 2019 adjusted free cash flow(12) grew $65.0 million year over year to
$127.0 million
* Company achieves guidance ranges for all guided metrics
* The company recently announced the sale of its U.S. Federal business. For
details related to this sale, please see press release and other materials
on the company's Investor Relations website
Unisys Corporation (NYSE: UIS) today reported full-year and fourth-quarter 2019
financial results and that it has achieved guidance on all provided metrics.
"The company had a very strong year. We grew non-GAAP adjusted revenue at the
highest annual rate since 1998 and grew both Services revenue and margins year
over year," said Unisys Chairman and CEO Peter A. Altabef. "Our cash flow
metrics also improved year over year."
Full-Year 2019 Highlights
Revenue Growth Profitability
Revenue Services Technology Operating Net Adj. Diluted
Growth Revenue Revenue Profit Income EBITDA EPS
Growth Growth Margin Margin Margin
GAAP 4.4% 7.0% (9.7%) GAAP 8.1% (0.6%) ($0.31)
Constant-Currency 7.0% 9.5% (7.1%) YoY (200) bps (330) bps N/A
(GAAP) Change
Non-GAAP 6.1% 6.7% 2.7% Non-GAAP 9.0% 4.8% 14.4% $2.12
YoY 10 bps 30 bps (90) bps 8.7%
Change
Summary of Full-Year 2019 Business Results
Company:
2019 revenue grew 4.4% year over year to $2.95 billion versus $2.83 billion in
2018 (7.0% growth on a constant-currency basis). Non-GAAP adjusted revenue grew
6.1% to $2.93 billion, representing the second-consecutive year of
year-over-year non-GAAP adjusted revenue growth, and the highest annual growth
rate since 1998. U.S. Federal sector revenue grew 26.5% year over year, the
highest annual rate since 2003.
2019 operating profit was $238.2 million, versus $284.1 million in 2018
(reflective of the additional $53.0 million of operating profit recorded upon
adoption of ASC 606 in 1Q18). Non-GAAP operating profit was up 7.1% year over
year to $262.7 million. Total company 2019 operating profit margin was 8.1%,
versus 10.1% in 2018 (reflective of 180 basis points of additional operating
profit margin that resulted from the revenue recorded upon adoption of ASC 606
in 1Q18). Total company non-GAAP operating profit margin was up 10 basis points
year over year to 9.0%.
Net loss for 2019 was $17.2 million versus net income of $75.5 million in 2018.
As noted above, $53.0 million of this difference is a result of the operating
profit recorded upon adoption of ASC 606 in 1Q18. The 2019 net loss also
reflects a $20.1 million charge related to the convertible note transaction,
along with post-retirement expense that was $12.8 million higher year over
year, and a $13.0 million charge related to costs to close out the remediation
of a site the company no longer operates. As a result of these items, the loss
per share was $0.31, compared to earnings per diluted share of $1.30 in the
prior-year period. Non-GAAP diluted earnings per share(10) was up 8.7% year
over year to $2.12 per share versus $1.95 per share in 2018.
Adjusted EBITDA(9) was $422.2 million, roughly flat relative to $422.5 million
in 2018. Net income margin was (0.6)%, compared to 2.7% in 2018, with the
year-over-year decline due to the flow-through of higher operating profit in
2018 resulting from the revenue recorded upon adoption of ASC 606, higher
pension expense in 2019 and the other one-time items highlighted above in
connection with net income/(loss). Adjusted EBITDA margin was in line with
guidance at 14.4%, versus 15.3% in 2018. The decline in adjusted EBITDA margin
year over year, relative to the increase in non-GAAP operating profit margin
was driven by a change in depreciation and amortization due a longer assumed
useful life for ClearPath Forward® software.
2019 cash provided by operations was up $50.0 million year over year to $123.9
million, versus $73.9 million in 2018. Free cash flow(11) was up $79.5 million
year over year to $(35.9) million, compared to $(115.4) million in 2018.
Adjusted free cash flow was up $65.0 million year over year to $127.0 million,
versus $62.0 million in 2018. At December 31, 2019, the company had $538.8
million in cash and cash equivalents.
Services:
Services revenue grew 7.0% year over year in 2019 (or 9.5% in
constant-currency) to $2.55 billion, representing the seventh-consecutive
quarter of year-over-year growth for the segment. 2019 Services non-GAAP
adjusted revenue grew 6.7% year over year to $2.54 billion, the highest annual
growth rate since 2003. 2019 Services gross profit margin was up 60 basis
points year over year to 16.6%, and 2019 Services operating profit margin was
up 140 basis points year over year to 4.2%. 2019 non-GAAP adjusted Services
gross profit(5) margin was up 40 basis points year over year to 16.0%, and 2019
non-GAAP adjusted Services operating profit margin was up 120 basis points year
over year to 3.6%. Services backlog(2) was $4.3 billion, relative to $4.8
billion at year-end 2018. The company has previously noted that the level of
Services backlog seen at year-end 2018 was not necessary to support its
near-term growth expectations.
Technology:
2019 Technology revenue was $396.0 million, relative to $438.7 million in 2018
that included $53.0 million of revenue recognized upon the adoption of ASC 606.
2019 non-GAAP adjusted Technology revenue was up 2.7% year over year to $396.0
million, relative to $385.7 million in 2018 (up 4.8% in constant currency).
2019 Technology gross profit margin was 61.8% compared to 69.4% in the
prior-year period, while Technology operating profit margin was 41.9% versus
51.3% in 2018 (reflective in part, in both cases of 180 basis points of
additional operating profit margin that resulted from the revenue recorded upon
adoption of ASC 606 in 1Q18). 2019 non-GAAP adjusted Technology gross profit
margin(7) was 61.8% compared to 65.4% in the prior-year period, while non-GAAP
adjusted Technology operating profit margin(8) was 41.9% versus 45.0% in 2018.
These year-over-year compares were impacted by more sales of third-party
hardware in 2019 than in 2018.
Summary of Fourth Quarter 2019 Business Results
Company:
Fourth-quarter 2019 revenue was $741.5 million, versus $760.9 million in the
prior-year period, ((1.4%) on a constant-currency basis). Non-GAAP adjusted
revenue was $739.3 million, relative to $754.6 million in the prior-year
period. In both cases, the year-over-year decline was due to Technology
revenues being more evenly distributed throughout the year in 2019, versus 2018
which saw lower full-year Technology revenue, but a higher concentration of
that revenue in the fourth quarter. U.S. Federal sector revenue grew 23.4% year
over year.
Operating profit margin in the fourth quarter was 5.0%, versus 9.5% in the
prior-year period. Non-GAAP operating profit margin was 8.6% in the fourth
quarter, relative to 11.9% in the prior-year period. In both cases, the
year-over-year decline was largely due to a more even distribution of
Technology revenue throughout 2019 than in 2018, which saw a higher
concentration in the fourth quarter.
Net loss for the fourth quarter 2019 was $10.8 million versus net income of
$25.0 million in the prior-year period, driven largely by the impact of
Technology noted above. As a result, loss per share was $0.17, compared to
earnings per diluted share of $0.41 in the prior-year period, and non-GAAP
earnings per diluted share was $0.60 per share versus $0.97 per share in the
prior-year period.
Adjusted EBITDA was $105.1 million versus $134.5 million in the prior-year
period as a result of the timing of Technology revenue as noted above, and net
income margin was (1.5)%, compared to 3.3% in the prior-year period. Adjusted
EBITDA margin was 14.2%, versus 17.8% in the prior-year period, with the
year-over-year decline also resulting from the timing of Technology revenue.
Operating cash flow in the fourth quarter was $125.7 million, versus $151.3
million in the prior-year period. Free cash flow was $95.6 million, compared to
$103.1 million in the prior-year period. Adjusted free cash flow was up 12.4%
year over year to $139.1 million, versus $123.8 million in the prior-year
period.
Services:
Services revenue grew 1.2% year over year in the fourth quarter (or 2.4% in
constant-currency) to $633.1 million, representing the seventh-consecutive
quarter of year-over-year growth for the segment. Services non-GAAP adjusted
revenue grew 1.9% year over year to $630.9 million. Services gross profit
margin was up 50 basis points year over year to 15.5%, and Services operating
profit margin was up 70 basis points year over year to 2.8%. Non-GAAP adjusted
Services gross profit margin was up 110 basis points year over year to 15.2%,
and non-GAAP adjusted Services operating profit margin was up 140 basis points
year over year to 2.5%.
Technology:
As noted, non-GAAP adjusted Technology revenue was higher and more evenly
distributed throughout the year in 2019 than was the case in 2018, which saw
lower full-year Technology revenue but a higher concentration of that revenue
in the fourth quarter. As a result, Technology revenue in the fourth quarter
2019 was $108.4 million, versus $135.4 million in the prior-year period, down
19.9% (or 18.5% in constant currency). Technology gross profit margin was 64.0%
compared to 75.5% in the prior-year period largely driven by the more even
distribution of Technology revenue throughout the year in 2019. Technology
operating profit margin was 45.2% versus 58.6% in the prior-year period, driven
by the same factors that influenced Technology gross margin. There were no
non-GAAP adjustments in the Technology segment in the current or prior-year
quarter.
Select Fourth-Quarter Contract Signings:
In the fourth quarter, the company entered into several contracts in each of
its sectors including the following:
* U.S. Federal: Unisys was awarded a subcontract with a Federal law
enforcement agency to provide end user services and infrastructure services
powered by InteliServeT.
* Public: A U.S. state government signed a contract with the company for an
integrated security framework and related disaster recovery services as
well as to continue to provide private hybrid cloud services. The two-year
contract is worth approximately $144 million, supporting government
initiatives to provide mission-critical systems and data to state agencies
and citizens.
* Commercial: Unisys signed a contract to expand its relationship with a
major Asian airline to provide technology that empowers cargo staff to be
more productive using mobile devices to process shipments on the move at
any location, such as a warehouse or an aircraft ramp, using digital
signatures and bar code scanning via a mobile device to process freight
more quickly and securely.
* Financial Services: A large financial sector client signed a new agreement
with Unisys to expand their use of Unisys' ClearPath Forward®
infrastructure to run its mission critical applications. This new contract
will also support the institution's training and development.
U.S. Federal Sale
In conjunction with the sale of Unisys' U.S. Federal business that was recently
announced, the company expects to hold an investor day on April 29th
(contingent on transaction closing prior to that date) to provide more insight
into the expected implications of that transaction. Additional details on this,
including expected timing, will be posted to the Unisys Investor Relations
Website.
Conference Call
Unisys will hold a conference call today at 5:00 p.m. Eastern Time to discuss
its results, including guidance for 2020 reflecting the impact of the expected
sale of its U.S. Federal business. The listen-only webcast, as well as the
accompanying presentation materials, can be accessed on the Unisys Investor
website at www.unisys.com/investor. Following the call, an audio replay of the
webcast, and accompanying presentation materials, can be accessed through the
same link.
(1) Constant currency - The company refers to growth rates in constant currency
or on a constant currency basis so that the business results can be viewed
without the impact of fluctuations in foreign currency exchange rates to
facilitate comparisons of the company's business performance from one period to
another. Constant currency is calculated by retranslating current and prior
period results at a consistent rate.
(2) 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, 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.
(3) 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.
(4) Non-GAAP operating profit - The company recorded pretax post-retirement
expense and pretax charges in connection with cost-reduction activities, debt
exchange 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 (3) herein.
(5) Non-GAAP adjusted Services gross profit - During 2018 and 2019, the
company included the adjustments discussed in (3) herein.
(6) Non-GAAP adjusted Services operating profit - During 2018 and 2019, the
company included the adjustments discussed in (3) herein.
(7) Non-GAAP adjusted Technology gross profit - In the first quarter of 2018,
the company included the ASC 606 adjustment discussed in (3) herein.
(8) Non-GAAP adjusted Technology operating profit - In the first quarter of
2018, the company included the ASC 606 adjustment discussed in (3) herein.
(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, debt exchange, and cost-reduction and other expenses, non-cash
share-based expense, and other (income) expense adjustment. In order to provide
investors with additional understanding of the company's operating results,
these charges are excluded from the adjusted EBITDA calculation. During 2018
and 2019, the company included the adjustments discussed in (3) herein.
(10) Non-GAAP diluted earnings per share - The company has recorded
post-retirement expense and charges in connection with debt exchange and
cost-reduction activities and other expenses. Management believes that
investors may have a better understanding of the company's performance and
return to shareholders by excluding these charges from the GAAP diluted
earnings/loss per share calculations. The tax amounts presented for these items
for the calculation of non-GAAP diluted earnings per share include the current
and deferred tax expense and benefits recognized under GAAP for these
amounts. During 2018 and 2019, the company included the adjustments discussed
in (3) herein.
(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 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.
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 significant pension obligations and required cash contributions and
requirements to make additional significant cash contributions to our defined
benefit pension plans; our ability to access financing markets; our ability to
maintain our installed base and sell new solutions; the potential adverse
effects of aggressive competition in the information services and technology
marketplace; 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; the business and financial risk in implementing
future acquisitions or dispositions; 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 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-K 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.: 0225/9753
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 Year Ended
December 31, December
31,
2019 2018 2019 2018
Revenue
Services $ $ $ $
633.1 625.5 2,552.7 2,386.3
Technology 108.4 135.4 396.0 438.7
741.5 760.9 2,948.7 2,825.0
Costs and expenses
Cost of revenue:
Services 551.3 550.5 2,134.1 2,010.5
Technology 40.0 32.0 148.2 128.2
591.3 582.5 2,282.3 2,138.7
Selling, general and administrative 103.6 95.8 396.9 370.3
Research and development 9.2 10.1 31.3 31.9
704.1 688.4 2,710.5 2,540.9
Operating profit 37.4 72.5 238.2 284.1
Interest expense 15.2 15.8 62.1 64.0
Other income (expense), net (27.9) (18.6) (136.4) (76.9)
Income (loss) before income taxes (5.7) 38.1 39.7 143.2
Provision for income taxes 11.2 13.9 53.0 64.3
Consolidated net income (loss) (16.9) 24.2 (13.3) 78.9
Net income (loss) attributable to (6.1) (0.8) 3.9 3.4
noncontrolling interests
Net income (loss) attributable to $ $ $ $
Unisys Corporation (10.8) 25.0 (17.2) 75.5
Earnings (loss) per share attributable
to Unisys Corporation
Basic $ $ $ $
(0.17) 0.49 (0.31) 1.48
Diluted $ $ $ $
(0.17) 0.41 (0.31) 1.30
Shares used in the per share
computations (in thousands):
Basic 62,397 51,028 55,961 50,946
Diluted 62,397 73,626 55,961 73,355
UNISYS CORPORATION
SEGMENT RESULTS
(Unaudited)
(Millions)
Total Eliminations Services Technology
Three Months Ended December
31, 2019
Customer revenue $ $ $ $
741.5 - 633.1 108.4
Intersegment - (8.4) - 8.4
Total revenue $ $ $ $
741.5 (8.4) 633.1 116.8
Gross profit percent 20.3 % 15.5 % 64.0 %
Operating profit percent 5.0 % 2.8 % 45.2 %
Three Months Ended December
31, 2018
Customer revenue $ $ $ $
760.9 - 625.5 135.4
Intersegment - (6.4) - 6.4
Total revenue $ $ $ $
760.9 (6.4) 625.5 141.8
Gross profit percent 23.4 % 15.0 % 75.5 %
Operating profit percent 9.5 % 2.1 % 58.6 %
Total Eliminations Services Technology
Year Ended December 31,
2019
Customer revenue $ $ $ $
2,948.7 - 2,552.7 396.0
Intersegment - (15.2) - 15.2
Total revenue $ $ $ $
2,948.7 (15.2) 2,552.7 411.2
Gross profit percent 22.6 % 16.6 % 61.8 %
Operating profit percent 8.1 % 4.2 % 41.9 %
Year Ended December 31,
2018
Customer revenue $ $ $ $
2,825.0 - 2,386.3 438.7
Intersegment - (24.7) - 24.7
Total revenue $ $ $ $
2,825.0 (24.7) 2,386.3 463.4
Gross profit percent 24.3 % 16.0 % 69.4 %
Operating profit percent 10.1 % 2.8 % 51.3 %
UNISYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Millions)
December 31, December 31,
2019 2018
Assets
Current assets
Cash and cash equivalents $ 538.8 $ 605.0
Accounts receivable, net 495.0 509.2
Contract assets 53.0 29.7
Inventories:
Parts and finished equipment 10.9 14.0
Work in process and materials 9.8 13.3
Prepaid expenses and other current assets 113.8 130.2
Total 1,221.3 1,301.4
Properties 806.0 800.2
Less - Accumulated depreciation and 681.6 678.9
amortization
Properties, net 124.4 121.3
Outsourcing assets, net 202.5 216.4
Marketable software, net 186.8 162.1
Operating lease right-of-use assets 127.1 -
Prepaid postretirement assets 136.2 147.6
Deferred income taxes 114.0 109.3
Goodwill 177.2 177.8
Restricted cash 13.0 19.1
Other long-term assets 201.5 202.6
Total $ 2,504.0 $ 2,457.6
Liabilities and deficit
Current liabilities
Current maturities of long-term debt $ $
13.5 10.0
Accounts payable 252.0 268.9
Deferred revenue 288.6 294.4
Other accrued liabilities 373.2 350.0
Total 927.3 923.3
Long-term debt 566.1 642.8
Long-term postretirement liabilities 1,960.2 1,956.5
Long-term deferred revenue 147.4 157.2
Long-term operating lease liabilities 83.6 -
Other long-term liabilities 47.7 77.4
Commitments and contingencies
Total deficit (1,228.3) (1,299.6)
Total $ 2,504.0 $ 2,457.6
UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Millions)
Year Ended
December 31,
2019 2018
Cash flows from operating activities
Consolidated net income (loss) $ $
(13.3) 78.9
Adjustments to reconcile consolidated net income (loss)
to net cash provided by operating
activities:
Foreign currency transaction losses 11.0 7.4
Non-cash interest expense 9.2 10.5
Loss on debt exchange 20.1 -
Employee stock compensation 13.2 13.2
Depreciation and amortization of properties 35.3 40.4
Depreciation and amortization of outsourcing assets 63.8 66.8
Amortization of marketable software 48.3 56.9
Other non-cash operating activities (1.6) (4.8)
Loss on disposal of capital assets 1.5 0.8
Gain on sale of properties - (7.3)
Postretirement contributions (109.4) (138.7)
Postretirement expense 96.6 84.1
Decrease in deferred income taxes, net 4.4 8.2
Changes in operating assets and liabilities:
Receivables, net (8.3) (50.5)
Inventories 6.1 (5.5)
Accounts payable and other accrued liabilities (114.4) (62.2)
Other liabilities 51.5 (0.4)
Other assets 9.9 (23.9)
Net cash provided by operating activities 123.9 73.9
Cash flows from investing activities
Proceeds from investments 3,568.9 3,708.0
Purchases of investments (3,566.1) (3,722.0)
Investment in marketable software (73.0) (80.7)
Capital additions of properties (38.0) (35.6)
Capital additions of outsourcing assets (48.8) (73.0)
Net proceeds from sale of properties (0.3) 19.2
Other (0.9) (0.9)
Net cash used for investing activities (158.2) (185.0)
Cash flows from financing activities
Cash paid in connection with debt exchange (56.7) -
Proceeds from capped call transactions 7.2 -
Proceeds from issuance of long-term debt 30.5 -
Payments of long-term debt (14.4) (2.3)
Financing fees - (0.2)
Other (4.6) (2.3)
Net cash used for financing activities (38.0) (4.8)
Effect of exchange rate changes on cash, cash equivalents - (24.1)
and restricted cash
Decrease in cash, cash equivalents and restricted cash (72.3) (140.0)
Cash, cash equivalents and restricted cash, beginning of 624.1 764.1
period
Cash, cash equivalents and restricted cash, end of $ $
period 551.8 624.1
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,
2019 2018 2019 2018
GAAP net income (loss) attributable to $ $ $ $
Unisys (10.8) 25.0 (17.2) 75.5
Corporation common shareholders
Topic 606 adjustment: pretax - - - (53.0)
tax - - - 5.3
net of tax - - - (47.7)
Postretirement pretax 25.1 25.9 96.6 84.1
expense:
tax (0.2) (1.1) - (0.3)
net of tax 24.9 24.8 96.6 83.8
Debt exchange, cost pretax 25.9 16.5 54.9 10.3
reduction and
other expenses:
tax - (1.8) (1.8) (1.6)
net of tax 25.9 14.7 53.1 8.7
minority 0.6 2.0 7.2 3.5
interest
net of minority 26.5 16.7 60.3 12.2
interest
Non-GAAP net income attributable to 40.6 66.5 139.7 123.8
Unisys Corporation
common shareholders
Add interest expense on convertible 2.1 5.0 15.3 19.6
notes
Non-GAAP net income attributable to $ $ $ $
Unisys Corporation 42.7 71.5 155.0 143.4
for diluted earnings per share
Weighted average shares (thousands) 62,397 51,028 55,961 50,946
Plus incremental shares from assumed
conversion:
Employee stock 456 730 411 541
plans
Convertible 8,626 21,868 16,577 21,868
notes
Non-GAAP adjusted weighted average 71,479 73,626 72,949 73,355
shares
Diluted earnings (loss) per share
GAAP basis
GAAP net income (loss) attributable to $ $ $ $
Unisys Corporation for (10.8) 30.0 (17.2) 95.1
diluted earnings per share
Divided by adjusted weighted average 62,397 73,626 55,961 73,355
shares
GAAP diluted earnings (loss) per share $ $ $ $
(0.17) 0.41 (0.31) 1.30
Non-GAAP basis
Non-GAAP net income attributable to $ $ $ $
Unisys Corporation for 42.7 71.5 155.0 143.4
diluted earnings per share
Divided by Non-GAAP adjusted weighted 71,479 73,626 72,949 73,355
average shares
Non-GAAP diluted earnings per share $ $ $ $
0.60 0.97 2.12 1.95
UNISYS CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
FREE CASH FLOW
Three Months Ended Year Ended
December 31, December 31,
2019 2018 2019 2018
Cash provided by operations $ $ $ $
125.7 151.3 123.9 73.9
Additions to marketable (16.8) (19.0) (73.0) (80.7)
software
Additions to properties (8.9) (10.6) (38.0) (35.6)
Additions to outsourcing (4.4) (18.6) (48.8) (73.0)
assets
Free cash flow 95.6 103.1 (35.9) (115.4)
Postretirement funding 27.1 14.2 109.4 138.7
Cost reduction and other 16.4 6.5 53.5 38.7
payments, net of
reimbursements
Adjusted free cash flow $ $ $ $
139.1 123.8 127.0 62.0
UNISYS CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
EBITDA
Three Months Ended Year Ended
December 31, December 31,
2019 2018 2019 2018
Net income (loss) attributable $ $ $ $
to Unisys Corporation (10.8) 25.0 (17.2) 75.5
common shareholders
Net income (loss) attributable (6.1) (0.8) 3.9 3.4
to noncontrolling interests
Interest expense, net of 13.1 13.1 51.5 52.3
interest income of $2.1, $2.7,
$10.6,
$11.7 respectively*
Provision for income taxes $ $ $ $
11.2 13.9 53.0 64.3
Depreciation 25.1 27.3 99.1 107.2
Amortization 13.3 14.1 48.3 56.9
EBITDA $ $ $ $
45.8 92.6 238.6 359.6
Topic 606 adjustment $ $ $ $
- - - (53.0)
Postretirement expense 25.1 25.9 96.6 84.1
Debt exchange, cost reduction 25.9 16.5 53.8 10.3
and other expenses**
Non-cash share based expense 3.1 3.2 13.2 13.2
Other (income) expense 5.2 (3.7) 20.0 8.3
adjustment***
Adjusted EBITDA $ $ $ $
105.1 134.5 422.2 422.5
*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 Year Ended
December 31, December 31,
2019 2018 2019 2018
Revenue $ $ $ $
741.5 760.9 2,948.7 2,825.0
Non-GAAP revenue 739.3 754.6 2,931.2 2,762.6
Net income as a percentage of (1.5)% 3.3 % (0.6)% 2.7 %
revenue
Non-GAAP net income as a percentage 5.5 % 8.8 % 4.8 % 4.5 %
of Non-GAAP revenue
Adjusted EBITDA as a percentage of 14.2 % 17.8 % 14.4 % 15.3 %
Non-GAAP revenue
UNISYS CORPORATION
RECONCILIATIONS OF GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING
(Unaudited)
(Millions)
Three Months Ended Year Ended
Services Segment December 31, December 31,
2019 2018 2019 2018
GAAP total revenue $ 633.1 $ 625.5 $ 2,552.7 $ 2,386.3
Restructuring (2.2) (6.3) (17.5) (9.4)
reimbursement
Non-GAAP revenue $ 630.9 $ 619.2 $ 2,535.2 $ 2,376.9
GAAP gross margin $ $ $ $ 380.8
98.0 93.9 423.9
Restructuring (2.2) (6.3) (17.5) (9.4)
reimbursement
Non-GAAP gross margin $ 95.8 $ 87.6 $ 406.4 $ 371.4
GAAP operating profit $ $ $ $
17.7 13.3 108.2 67.6
Restructuring (2.2) (6.3) (17.5) (9.4)
reimbursement
Non-GAAP operating $ 15.5 $ $ $ 58.2
profit 7.0 90.7
GAAP gross margin % 15.5% 15.0% 16.6% 16.0%
Non-GAAP gross margin % 15.2% 14.1% 16.0% 15.6%
GAAP operating profit % 2.8% 2.1% 4.2% 2.8%
Non-GAAP operating 2.5% 1.1% 3.6% 2.4%
profit %
Three Months Ended Year Ended
Technology Segment December 31, December 31,
2019 2018 2019 2018
GAAP total revenue $ 116.8 $ 141.8 $ $ 463.4
411.2
Topic 606 adjustment - - - (53.0)
Non-GAAP revenue $ 116.8 $ 141.8 $ 411.2 $ 410.4
GAAP gross margin $ $ 107.1 $ $ 321.5
74.8 254.2
Topic 606 adjustment - - - (53.0)
Non-GAAP gross margin $ 74.8 $ 107.1 $ 254.2 $ 268.5
GAAP operating profit $ $ $ $ 237.8
52.8 83.1 172.2
Topic 606 adjustment - - - (53.0)
Non-GAAP operating $ 52.8 $ 83.1 $ 172.2 $ 184.8
profit
GAAP gross margin % 64.0% 75.5% 61.8% 69.4%
Non-GAAP gross margin % 64.0% 75.5% 61.8% 65.4%
GAAP operating profit % 45.2% 58.6% 41.9% 51.3%
Non-GAAP operating 45.2% 58.6% 41.9% 45.0%
profit %
UNISYS CORPORATION
RECONCILIATIONS OF GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING
(Unaudited)
(Millions)
Three Months Ended Year Ended
Total Unisys December 31, December 31,
2019 2018 2019 2018
GAAP total revenue $ $ $ $
741.5 760.9 2,948.7 2,825.0
Topic 606 adjustment - - - (53.0)
Restructuring reimbursement (2.2) (6.3) (17.5) (9.4)
Non-GAAP revenue $ $ 754.6 $ 2,931.2 $ 2,762.6
739.3
GAAP gross margin $ $ $ $
150.2 178.4 666.4 686.3
Topic 606 adjustment - - - (53.0)
Restructuring reimbursement (2.2) (6.3) (17.5) (9.4)
Postretirement expense - - - -
Cost-reduction expense 17.7 22.3 11.0 18.1
Non-GAAP gross margin $ $ 194.4 $ $
165.7 659.9 642.0
GAAP operating profit $ $ $ $
37.4 72.5 238.2 284.1
Topic 606 adjustment - - - (53.0)
Restructuring reimbursement (2.2) (6.3) (17.5) (9.4)
Postretirement expense 0.8 0.9 3.3 3.8
Cost-reduction and other 27.6 22.8 38.7 19.7
expenses
Non-GAAP operating profit $ $ $ $
63.6 89.9 262.7 245.2
GAAP gross margin % 20.3% 23.4% 22.6% 24.3%
Non-GAAP gross margin % 22.4% 25.8% 22.5% 23.2%
GAAP operating profit % 5.0% 9.5% 8.1% 10.1%
Non-GAAP operating profit % 8.6% 11.9% 9.0% 8.9%
SOURCE Unisys Corporation
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
February 26, 2020 02:00 ET (07:00 GMT)
Grafico Azioni Unisys (LSE:USY)
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Da Ott 2024 a Nov 2024
Grafico Azioni Unisys (LSE:USY)
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