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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Unisys Corporation | LSE:USY | London | Ordinary Share | COM STK US$0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 8.51 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Cmp Integrated Sys Design | 2.02B | -430.7M | -6.2958 | -0.88 | 378.99M |
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Unisys Announces First-Quarter 2017 Financial Results, Re-affirms Full-Year
Financial Guidance
BLUE BELL, Pa., April 24, 2017 --
1Q 2017:
* Operating profit margin was (0.4) percent, up 370 basis points year over
year
* Non-GAAP operating profit(4) margin was 6 percent, up 340 basis points year
over year
* Revenue was roughly flat year over year at $665 million versus $667 million
in the prior-year period
* Net loss attributable to Unisys Corporation common shareholders was $(33)
million, relative to $(40) million in the prior-year period
* Adjusted EBITDA(5) was $84 million, an increase of 41 percent year over
year; Adjusted EBITDA margin was 13 percent, an increase of 370 basis
points year over year
* Diluted loss per share of $(0.65), versus $(0.80) in the prior-year period;
Non-GAAP diluted earnings per share(7) of $0.30 versus $0.11 in the
prior-year period
* Unisys reaffirms full-year guidance for revenue of $2.65-2.75 billion,
non-GAAP operating profit margin of 7.25-8.25 percent and adjusted free
cash flow of $130-170 million
Unisys Corporation (NYSE: UIS) today reported first-quarter 2017 financial
results. Operating profit margin was up year over year, and revenue was
relatively flat versus the prior-year period. Additionally, the company saw
strong contract signings during the quarter, with Total Contract Value(1) (TCV)
signed up 26 percent year over year.
"Our first-quarter results indicate continued progress executing against our
strategic and financial goals, including margin expansion and improvement of
revenue trends via our vertical go-to-market strategy," said Unisys President
and CEO Peter Altabef. "We intend to continue our disciplined financial focus
over the remainder of the year but are pleased with our strong start in the
first quarter. We are also pleased to have enhanced our liquidity position by
recently raising $440 million in a senior secured notes offering."
Summary of First-Quarter 2017 Business Results
Company:
Revenue for the quarter of $665 million was roughly flat relative to $667
million in the first quarter 2016 and was also roughly flat year over year on a
constant-currency(2) basis.
First-quarter 2017 operating profit margin of (0.4) percent, which includes
cost-reduction and other charges and pension expense, was up 370 basis points
year over year. Non-GAAP operating profit margin was 6 percent, up 340 basis
points versus the first quarter 2016.
Net loss attributable to Unisys Corporation common shareholders for the quarter
was $(33) million, an improvement relative to $(40) million in the prior-year
period. Adjusted EBITDA for the quarter was $84 million, which was up 41
percent year over year. Adjusted EBITDA margin for the quarter was 13 percent,
up 370 basis points year over year.
In the first quarter 2017, operating cash flow decreased by $67 million year
over year to $(41) million. The company generated free cash flow(3) of $(76)
million for the quarter, a reduction of $66 million year over year. Adjusted
free cash flow(6) for the quarter of $(26) million decreased $66 million from
the prior-year period. Reductions in cash flow year over year were largely due
to a $40 million payment from a client received in the first quarter of 2016
that had been due in the fourth quarter of 2015, along with several other
timing issues related to the collection of receivables.
At March 31, 2017, the company had $302 million in cash. In April 2017, the
company raised $440 million of capital through a high-yield notes offering. The
company has paid the trustee the amount necessary to discharge the remaining
portion of Senior Notes due 2017 outstanding at the time of the offering and
expects to redeem them by May 6, 2017. Pro forma for the offering and
redemption, the company would have had $635 million in cash as of March 31,
2017.
Services:
Services revenue, which represented 88 percent of first-quarter total revenue,
declined by 2 percent as reported and in constant currency to $585 million.
Services backlog ended the quarter at $3.7 billion, versus $3.9 billion last
quarter. Services gross margin was up 400 basis points versus the first quarter
2016 at 18 percent, reflecting ongoing efforts to enhance the efficiency of the
Services business and helped by a particularly profitable transaction. Services
operating profit margin was up 400 basis points to 5 percent.
Technology:
Technology revenue, which represented 12 percent of total revenue, was up 10
percent year over year to $79 million, up 7 percent in constant currency.
Technology gross margin was down slightly to 47 percent from 49 percent in the
prior-year period. Technology operating profit margin was down to 15 percent
from 18 percent in the prior-year period.
Continued Execution on Business Strategy
The company in the first quarter entered into several key contracts in each of
its sectors of focus:
* U.S. Federal: The U.S. Internal Revenue Service (IRS) selected Unisys to
continue its work updating, operating and maintaining the system used by
the U.S. government to verify and monitor excise fuel tax filings.
* Public: New Zealand Transport Agency (NZTA) has renewed with Unisys to
support their driver and vehicle registry platform.
* Commercial: Unisys announced a contract with Catholic Health Initiatives
(CHI), the nation's third-largest nonprofit health system, to provide
service support and end-user services for CHI's 90,000-plus employees
across the United States. It was Unisys' largest contract of the quarter.
* Financial Services: Unisys signed a new agreement with the largest
financial services group in Latin America, to provide automation services
for its branch network, as well as maintenance and support services for the
bank's ATMs throughout Brazil. It was Unisys' largest financial services
contract of the quarter.
Conference Call
Unisys will hold a conference call today at 5:30 p.m. Eastern Time to discuss
its results. The listen-only Webcast, as well as the accompanying presentation
materials, can be accessed on the Unisys Investor Web site 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 signed contracts including option years and without regard for
cancellation.
(2) 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.
Non-GAAP and Other Information
Although appropriate under generally accepted accounting principles (GAAP), the
company's results reflect charges that the company believes are not indicative
of its ongoing operations and that can make its profitability and liquidity
results difficult to compare to prior periods, anticipated future periods, or
to its competitors' results. These items consist of pension 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.
(3) 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 required for reinvestment.
(4) Non-GAAP operating profit - The company recorded pretax pension 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.
(5) 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 pension
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.
(6) Adjusted free cash flow - Because inclusion of the company's pension
contributions and cost-reduction 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 and is more indicative of its on-going
operations. This liquidity measure was provided to analysts and investors in
the form of external guidance and is used by management to measure operating
liquidity.
(7) Non-GAAP diluted earnings per share - The company has recorded pension
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.
About Unisys
Unisys is a global information technology company that specializes in providing
industry-focused solutions integrated with leading-edge security to clients in
the government, financial services and commercial markets. Unisys offerings
include security solutions, advanced data analytics, cloud and infrastructure
services, application services and application and server software. For more
information, 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, total contract value 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 total contract value are
based, in part, on the assumption that all options of the contracts 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 the company's ability to
effectively anticipate and respond to volatility and rapid technological
innovation in its industry; the company's ability to improve margins in its
services business; the company's ability to sell new products while maintaining
its installed base in its technology business; the company's ability to access
financing markets to refinance its outstanding debt; the company's ability to
realize anticipated cost savings and to successfully implement its cost
reduction initiatives to drive efficiencies across all of its operations; the
company's significant pension obligations and requirements to make significant
cash contributions to its defined benefit plans; the company's ability to
attract, motivate and retain experienced and knowledgeable personnel in key
positions; the risks of doing business internationally when a significant
portion of the company's revenue is derived from international operations; the
potential adverse effects of aggressive competition in the information services
and technology marketplace; the company's ability to retain significant
clients; the company's contracts may not be as profitable as expected or
provide the expected level of revenues; cybersecurity breaches could result in
significant costs and could harm the company's business and reputation; a
significant disruption in the company's IT systems could adversely affect the
company's business and reputation; the company may face damage to its
reputation or legal liability if its clients are not satisfied with its
services or products; the performance and capabilities of third parties with
whom the company has commercial relationships; the adverse effects of global
economic conditions, acts of war, terrorism or natural disasters; contracts
with U.S. governmental agencies may subject the company to audits, criminal
penalties, sanctions and other expenses and fines; the potential for
intellectual property infringement claims to be asserted against the company or
its clients; the possibility that pending litigation could affect the company's
results of operations or cash flow; the business and financial risk in
implementing future dispositions or acquisitions; 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.: 0424/9499
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,
2017 2016
Revenue
Services $ $
585.3 595.1
Technology 79.2 71.7
664.5 666.8
Costs and expenses
Cost of revenue:
Services 504.5 533.7
Technology 39.8 34.6
544.3 568.3
Selling, general and administrative 109.1 110.1
Research and development 13.8 16.0
667.2 694.4
Operating profit (loss) (2.7) (27.6)
Interest expense 5.7 4.4
Other income (expense), net (8.4) (1.2)
Income (loss) before income taxes (16.8) (33.2)
Provision for income taxes 12.9 5.5
Consolidated net income (loss) (29.7) (38.7)
Net income attributable to noncontrolling interests 3.0 1.2
Net income (loss) attributable to Unisys Corporation common $(32.7) $ (39.9)
shareholders
Earnings (loss) per share attributable to Unisys
Corporation
Basic $ (0.65) $ (0.80)
Diluted $ (0.65) $ (0.80)
Shares used in the per share computations (in thousands)
Basic 50,256 50,004
Diluted 50,256 50,004
UNISYS CORPORATION
SEGMENT RESULTS
(Unaudited)
(Millions)
Total Eliminations Services Technology
Three Months Ended March 31,
2017
Customer revenue $ 664.5 $ 585.3 $ 79.2
Intersegment $ (5.3) - 5.3
Total revenue $ 664.5 $ (5.3) $ 585.3 $ 84.5
Gross profit percent 18.1 % 18.2 % 46.6 %
Operating profit (loss) (0.4)% 4.7 % 15.4 %
percent
Three Months Ended March 31,
2016
Customer revenue $ 666.8 $ 595.1 $ 71.7
Intersegment $ - 5.6
(5.6)
Total revenue $ $ (5.6) $ $ 77.3
666.8 595.1
Gross profit percent 14.8 % 14.2 % 48.6 %
Operating profit (loss) (4.1)% 0.7 % 18.1 %
percent
UNISYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Millions)
March 31, December 31,
2017 2016
Assets
Current assets
Cash and cash equivalents $ 302.0 $ 370.6
Accounts and notes receivable, net 504.9 505.8
Inventories:
Parts and finished equipment 18.5 14.0
Work in process and materials 10.9 15.0
Prepaid expenses and other current assets 121.8 121.9 *
Total 958.1 1,027.3 *
Properties 902.5 886.6
Less-Accumulated depreciation and 749.2 741.3
amortization
Properties, net 153.3 145.3
Outsourcing assets, net 164.8 172.5
Marketable software, net 135.1 137.0
Prepaid postretirement assets 36.7 33.3
Deferred income taxes 144.0 146.1 *
Goodwill 179.5 178.6
Restricted Cash 33.5 30.5 *
Other long-term assets 157.3 151.0 *
Total $ 1,962.3 $ 2,021.6 *
Liabilities and deficit
Current liabilities
Current maturities of long-term-debt $ 106.3 $ 106.0
Accounts payable 200.1 189.0
Deferred revenue 333.3 337.4
Other accrued liabilities 299.1 349.2 *
Total 938.8 981.6 *
Long-term debt 195.1 194.0 *
Long-term postretirement liabilities 2,258.5 2,292.6
Long-term deferred revenue 110.6 117.6
Other long-term liabilities 86.0 83.2 *
Commitments and contingencies
Total deficit (1,626.7) (1,647.4)
Total $ 1,962.3 $ 2,021.6 *
* Certain amounts have been reclassified to conform to the current-year
presentation.
UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Millions)
Three Months Ended
March 31,
2017 2016 *
Cash flows from operating activities
Consolidated net income (loss) $ $ (38.7)
(29.7)
Add (deduct) items to reconcile consolidated net loss to net
cash provided by
(used for) operating activities:
Foreign currency transaction losses 5.3 0.1
Non-cash interest expense 2.0 0.7
Employee stock compensation 3.7 3.2
Depreciation and amortization of properties 10.1 9.6
Depreciation and amortization of outsourcing assets 12.9 11.1
Amortization of marketable software 15.7 16.4
Other non-cash operating activities (1.1) 0.3
Loss on disposal of capital assets 3.8 0.3
Pension contributions (28.9) (31.6)
Pension expense 24.5 20.3
Decrease (increase) in deferred income taxes, net 2.2 (6.9)
(Increase) decrease in receivables, net 0.1 69.4
Decrease (increase) in inventories 0.1 (1.9)
Decrease in accounts payable and other accrued liabilities (50.0) (34.8) *
(Decrease) increase in other liabilities (10.3) 3.4
(Increase) Decrease in other assets (1.4) 5.0 *
Net cash (used for) provided by operating activities (41.0) 25.9 *
Cash flows from investing activities
Proceeds from investments 1,218.9 1,365.0
Purchases of investments (1,211.5) (1,367.8)
Investment in marketable software (13.8) (14.3)
Capital additions of properties (8.5) (6.6)
Capital additions of outsourcing assets (12.9) (15.1)
Other (0.3) (0.2) *
Net cash used for investing activities (28.1) (39.0) *
Cash flows from financing activities
Proceeds from issuance of long-term debt - 190.0
Payments for capped call transactions - (24.3)
Issuance costs relating to long-term debt - (6.2)
Payments of long-term debt (0.7) (0.7)
Other (2.1) (0.4) *
Net cash provided by financing activities (2.8) 158.4 *
Effect of exchange rate changes on cash, cash equivalents and 6.3 5.5 *
restricted cash
Increase (decrease) in cash, cash equivalents and restricted (65.6) 150.8 *
cash
Cash, cash equivalents and restricted cash, beginning of 401.1 396.8 *
period
Cash, cash equivalents and restricted cash, end of period $ 335.5 $ 547.6 *
* Certain amounts have been reclassified to conform with the 2017 presentation.
UNISYS CORPORATION
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited)
(Millions, except per share data)
Three Months
Ended March 31,
2017 2016
GAAP net income (loss) attributable to Unisys Corporation $ $
common (32.7) (39.9)
shareholders
Cost reduction and other expense: pretax 25.4 26.9
tax provision (benefit) (0.5) (2.2)
net of tax 24.9 24.7
Pension Expense: pretax 24.5 20.3
tax provision (benefit) 0.2 0.3
net of tax 24.7 20.6
Non-GAAP net income (loss) attributable to Unisys Corporation 16.9 5.4
common
shareholders
Add interest expense on convertible notes 4.7 -
Non-GAAP net income (loss) attributable to Unisys Corporation $ $ 5.4
for diluted 21.6
earnings per share
Weighted average shares (thousands) 50,256 50,004
Plus incremental shares from assumed conversion:
Employee stock plans 388 134
Convertible notes 21,868 -
Non-GAAP adjusted weighted average shares 72,511 50,138
Diluted earnings (loss) per share
GAAP basis
GAAP net income (loss) attributable to Unisys Corporation for $ $
diluted earnings (32.7) (39.9)
per share
Divided by adjusted weighted average shares 50,256 50,004
GAAP diluted earnings (loss) per share $ $
(0.65) (0.80)
Non-GAAP basis
Non-GAAP net income (loss) attributable to Unisys Corporation $ 21.6 $ 5.4
for diluted earnings
per share
Divided by Non-GAAP adjusted weighted average shares 72,511 50,138
Non-GAAP diluted earnings (loss) per share $ 0.30 $
0.11
UNISYS CORPORATION
RECONCILIATION OF GAAP OPERATING PROFIT TO NON-GAAP OPERATING PROFIT
(Unaudited)
(Millions)
Three Months
Ended March 31,
2017 2016
GAAP operating profit (loss) $ (2.7) $ (27.6)
Cost reduction and other expense 20.1 26.9
FAS87 pension expense 24.5 20.3
Non-GAAP operating profit (loss) $ 41.9 $ 19.6
Customer Revenue $ 664.5 $666.8
GAAP operating profit (loss) % (0.4)% (4.1)%
Non-GAAP operating profit (loss) % 6.3 % 2.9 %
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
FREE CASH FLOW
Three Months
Ended March 31,
2017 2016
Cash provided by (used for) $ (41.0) $ 25.9
operations
Additions to marketable software (13.8) (14.3)
Additions to properties (8.5) (6.6)
Additions to outsourcing assets (12.9) (15.1)
Free cash flow (76.2) (10.1)
Pension funding 28.9 31.6
Cost reduction and other payments 21.2 18.0
Adjusted free cash flow $(26.1) $ 39.5
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
EBITDA
Three Months
Ended March 31,
2017 2016
Net income (loss) attributable to Unisys Corporation $ (32.7) $ (39.9)
common shareholders
Net income attributable to noncontrolling interests 3.0 1.2
Interest expense, net of interest income of $2.4 and $2.5 3.3 1.9
respectively *
Provision for income taxes 12.9 5.5
Depreciation 23.0 20.7
Amortization 15.7 16.4
EBITDA $ 25.2 $ 5.8
Pension Expense 24.5 20.3
Cost reduction and other expense 25.4 26.9
Non-cash share based expense 3.7 3.2
Other (income) expense adjustment** 5.5 3.7
Adjusted EBITDA $ 84.3 $ 59.9
* Included in Other (income) expense, net on the Consolidated Statements of
Income
** Other (income) expense, net as reported on the Consolidated Statements of
Income less Interest income and
items included in cost reduction and other expense
CONTACT: Investors: Courtney Holben, Unisys, 215-986-3379,
courtney.holben@unisys.com or Media: John Clendening, Unisys, 214-403-1981,
john.clendening@unisys.com
END
(END) Dow Jones Newswires
April 25, 2017 02:00 ET (06:00 GMT)
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