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| Name | Symbol | Market | Type |
|---|---|---|---|
| Co.st.gob. 29 | LSE:15PT | London | Medium Term Loan |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
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Hot Features
Premium
RNS Number:0078H
Unisys Corp
16 July 2001
Media Contact: Jay Grossman, Unisys, 215-986-6948
jay.grossman@unisys.com
Investor Contact: Jim Kerr, Unisys, 215-986-5795
jim,kerr@unisys.com
UNISYS SECOND-QUARTER 2001 EARNINGS MEET EXPECTATIONS
BLUE BELL, PA, JULY 16, 2001 -- Unisys Corporation (NYSE: UIS) today reported
second-quarter 2001 net income of $29.3 million, or 9 cents per diluted share,
excluding an after-tax extraordinary charge of $17.2 million related to the
company's previously announced cash tender offer for its 11 3/4% senior notes
due 2004. This compared to pro forma net income of $59.4 million, or 19 cents
per diluted share, in the second quarter of 2000, excluding an after-tax
extraordinary charge of $19.8 million for the early retirement of debt.
Including the charge for the cash tender offer, Unisys reported second-quarter
2001 net income of $12.1 million, or 4 cents per share.
The pro forma second-quarter 2000 results exclude low-margin commodity hardware
business that the company has de-emphasized as a result of its focus on higher
value-added business areas. On an as-reported basis including de-emphasized
commodity hardware, the company's second-quarter 2000 net income before the
debt-related charge was $56.3 million, or 18 cents per diluted share. Including
the charge, year-ago reported net income was $36.5 million, or 12 cents per
share.
Second-quarter 2001 revenue rose 3% to $1.46 billion compared to pro forma
revenue of $1.42 billion in the year-ago period. On a constant currency basis,
revenue increased 8% from the year-ago period. Including de-emphasized commodity
revenue in the year-ago period, second-quarter 2000 reported revenue was $1.60
billion.
Comments from Chairman and CEO Larry Weinbach
"We continue to manage our business profitably in a very challenging economic
environment," said Unisys Chairman and CEO Lawrence A. Weinbach. "As customers
delayed planned IT projects and reduced expenses during this period, we saw weak
demand in our high-end enterprise server and systems integration businesses. On
the positive side, we saw continued revenue growth in our network services and
outsourcing businesses. Geographically, we saw order weakness particularly in
our international business as economic uncertainties spread globally.
"We also aggressively managed expenses and were able to meet our financial
targets for the quarter. Our selling, general, and administrative expenses fell
12% in the quarter from year-ago levels, reflecting continued tight control over
discretionary expenses and improved cost efficiencies. We also continue to
benefit from a dramatically strengthened financial profile. During the quarter
we refinanced our last piece of high-coupon debt at a significantly lower rate,
further reducing annual interest expense and essentially completing our
multi-year program to create a high-quality capital structure for this company."
Weinbach said that, despite the uncertain economic environment, the company
continues to invest in the strategic programs that are key to its future growth.
"In our services business, we continue to focus on higher value-add
opportunities where we can apply our people skills and in-depth industry
expertise," Weinbach said. "Our network services and outsourcing businesses
continue to grow as more clients turn to Unisys to help them manage their IT
operations, business processes, and network infrastructures more
cost-effectively. While the market for systems integration and IT consulting was
weak industry-wide, we are maintaining our focus on Web-enabled services and
solutions for specific industries that we believe will be in demand as economic
conditions improve.
"In our technology business, our ES7000 system, based on the leading-edge
Cellular Multi-Processing (CMP) architecture, is delivering impressive server
performance benchmarks. In a recent test, the ES7000 achieved top results in the
TPC-W benchmark for e-business applications. The ES7000 also outperformed
competitive Unix-based systems in the SAP sales and distribution benchmark,
supporting 20,000 concurrent benchmark users. We continue to aggressively market
the price/performance advantages of the ES7000, and are seeing strong interest
by clients and potential clients in the new technology. In our ClearPath
business, we are on track to begin initial shipments of new high-end models late
in the third quarter and expect this new line of servers to benefit us in the
fourth quarter."
Overall Company Highlights
Unisys reported that U.S. revenue grew 7% in the second quarter compared to the
year-ago period. While revenue in international markets was flat in the quarter,
on a constant currency basis international revenue grew 9% over the prior-year
quarter.
U.S. orders were down slightly in the quarter while international orders showed
double-digit declines. This reflected the weak global demand environment.
Technology orders showed sharp declines in the quarter, while services orders
showed declines.
Unisys said its margins in the quarter were impacted by weak demand primarily in
the higher-margin areas of ClearPath enterprise servers and in systems
integration and solutions. The company reported an overall second-quarter 2001
gross profit margin of 27.2%, down from 33.2% in the year-ago period, and an
operating profit margin of 3.1%, down from 5.8% a year ago. Unisys said that
strong control over expenses contributed to a 12% decline in selling, general,
and administrative (SG&A) expenses in the quarter over the year-ago period.
Overall, SG&A expenses declined to 18.9% of revenue compared to 22.1% of revenue
in the year-ago quarter.
Business Segment Highlights
Customer revenue in the company's services business increased 7% in the second
quarter driven by substantial growth in network services as well as growth in
outsourcing. Gross profit margins in the services business declined 3 percentage
points from year-ago levels to 19.2%, primarily reflecting the startup of large
outsourcing contracts. Services operating margins improved to 0.9% from
breakeven a year ago, reflecting cost reductions.
Customer revenue in the company's technology business declined 8% from
prior-year levels, driven by lower shipments of ClearPath systems. Reflecting
the mix change in the quarter, gross margins in the technology business
decreased 6 percentage points over the year-ago period to 43.5% while operating
margins decreased 5 percentage points from the year-ago period to 10.5%.
Cash Flow and Balance Sheet Highlights
Unisys used $14 million of cash from operations in the second quarter compared
to operational cash usage of $67 million in the year-ago period. The lower cash
usage primarily reflected improvements in working capital, particularly accounts
receivable and inventories. The company ended the second quarter with $245
million of cash on hand.
During the quarter, Unisys conducted a cash tender offer for its 11 3/4% senior
notes due 2004. Approximately $319 million of the $334 million notes outstanding
were retired through this offer. The company financed the tender offer primarily
with the proceeds of its offering of $350 million 8 1/8% senior notes due in
2006, which was completed in May. This will reduce interest expense by
approximately $10 million on an annualized basis.
Business Outlook
"Given the current economic situation and the impact it had on our orders in the
second quarter, we remain cautious about business demand over the near term,"
Weinbach said. "We expect the weak international business conditions and the
traditionally soft sales in Europe during the summer season to impact our
third-quarter results. Based on this, we look for our earnings per share in the
third quarter to be in the range of 5-10 cents. We continue to look for our
results to strengthen in the fourth quarter as we make volume shipments of our
new high-end ClearPath servers, as ES7000 server shipments build, and as our
recent large outsourcing contracts continue to ramp up. Our preliminary estimate
is for fourth-quarter 2001 earnings per share of approximately 25-30 cents. This
would allow us to close out the year with strength and position us well for what
we hope will be an improved economic environment heading into 2002."
Conference Call
Unisys will hold a conference call to discuss the results today from 4:30 - 5:30
EDT. The listen-only audiocast can be accessed via a link on the Unisys Investor
Web site at www.unisys.com/investor. An audio replay of the Webcast will be
available for about 10 days following the call.
About Unisys
Unisys is an e-business solutions company whose 37,000 employees help customers
in 100 countries apply information technology to seize opportunities and
overcome challenges of the Internet economy. Unisys people integrate and deliver
the solutions, services, platforms and network infrastructure required by
business and government to transform their organizations for success in this new
era. The company offers a rich portfolio of Unisys e-@ction Solutions for
e-business based on its expertise in vertical industry solutions, network
services, outsourcing, systems integration and multivendor support, coupled with
enterprise-class server and related technologies. The primary vertical markets
Unisys serves worldwide include financial services, transportation,
communications, publishing and commercial sectors, as well as the public sector,
including federal government customers. Unisys is headquartered in Blue Bell,
Pennsylvania, in the Greater Philadelphia area. For more information on the
company, access the Unisys home page on the World Wide Web at www.unisys.com.
Investor information can be found at www.unisys.com/investor.
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. 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. The factors that could affect the company's
future financial results are discussed more fully in the company's latest Form
10-Q as filed with the Securities and Exchange Commission.
RELEASE NO.: 0701/8039 (See accompanying financial information below)
http://www.unisys.com/news/releases/2001/jul/07168039.asp
Unisys is a registered trademark and e-@ction is a trademark of Unisys
Corporation. All other brands and products referenced herein are acknowledged to
be trademarks or registered trademarks of their respective holders.
UNISYS CORPORATION
CONSOLIDATED STATEMENT OF INCOME - PROFORMA
EXCLUDING EXTRAORDINARY ITEMS
(Millions, except per share data)
Three Months Six Months
Ended June 30 Ended June 30
------------------ ------------------
2001 2000 2001 2000
-------- -------- -------- --------
Revenue $1,461.4 $1,423.8 $3,085.2 $2,953.6
-------- -------- -------- --------
Costs and expenses
Cost of revenue 1,064.0 950.6 2,260.2 1,947.6
Selling, general and
administrative 276.4 314.7 521.7 589.1
Research and development 75.2 75.4 151.2 155.5
-------- -------- -------- --------
1,415.6 1,340.7 2,933.1 2,692.2
-------- -------- -------- --------
Operating income 45.8 83.1 152.1 261.4
Interest expense 17.6 18.7 33.5 39.2
Other income
(expense), net 15.7 23.8 28.7 30.0
-------- -------- -------- --------
Income before income taxes 43.9 88.2 147.3 252.2
Provision for income taxes 14.6 28.8 48.7 85.4
-------- -------- -------- --------
Net income $29.3 $59.4 $98.6 $166.8
======== ======== ======== ========
Diluted earnings per share $ .09 $ .19 $ .31 $ .53
======== ======== ======== ========
UNISYS CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Millions, except per share data)
Three Months Six Months
Ended June 30 Ended June 30
------------------ ------------------
2001 2000 2001 2000
-------- -------- -------- --------
Revenue $1,461.4 $1,597.1 $3,085.2 $3,265.8
-------- -------- -------- --------
Costs and expenses
Cost of revenue 1,064.0 1,116.3 2,260.2 2,245.7
Selling, general and
administrative 276.4 322.5 521.7 604.0
Research and development 75.2 78.2 151.2 160.3
-------- -------- -------- --------
1,415.6 1,517.0 2,933.1 3,010.0
-------- -------- -------- --------
Operating income 45.8 80.1 152.1 255.8
Interest expense 17.6 18.7 33.5 39.2
Other income
(expense), net 15.7 23.9 28.7 30.1
-------- -------- -------- --------
Income before income taxes 43.9 85.3 147.3 246.7
Provision for income taxes 14.6 29.0 48.7 83.9
-------- -------- -------- --------
Income before
extraordinary items 29.3 56.3 98.6 162.8
Extraordinary items (17.2) (19.8) (17.2) (19.8)
-------- -------- -------- --------
Net income $12.1 $36.5 $81.4 $143.0
======== ======== ======== ========
Earnings per share
Basic
Before extraordinary items $ .09 $ .18 $ .31 $ .52
Extraordinary items (.05) (.06) (.05) (.06)
-------- -------- -------- --------
Total $ .04 $ .12 $ .26 $ .46
======== ======== ======== ========
Diluted
Before extraordinary items $ .09 $ .18 $ .31 $ .51
Extraordinary items (.05) (.06) (.05) (.06)
-------- -------- -------- --------
Total $ .04 $ .12 $ .26 $ .45
======== ======== ======== ========
Shares used in the per share
computations (thousands):
Basic 317,658 312,515 316,984 311,838
======== ======== ======== ========
Diluted 319,396 317,021 319,212 317,050
======== ======== ======== ========
UNISYS CORPORATION
SUPPLEMENTAL SUMMARY - PROFORMA
(Millions)
Elimi-
Total nations Services Technology
-------- -------- -------- ----------
Three Months Ended
June 30, 2001
------------------
Customer revenue $1,461.4 $1,084.7 $376.7
Intersegment ($82.9) 18.2 64.7
-------- -------- -------- --------
Total revenue $1,461.4 ($82.9) $1,102.9 $441.4
======== ======== ======== ========
Gross profit percent 27.2% 19.2% 43.5%
======== ======== ========
Operating income
percent 3.1% 0.9% 10.5%
======== ======== ========
Three Months Ended
June 30, 2000
------------------
Customer revenue $1,423.8 $1,013.3 $410.5
Intersegment ($107.5) 17.0 90.5
-------- -------- -------- --------
Total revenue $1,423.8 ($107.5) $1,030.3 $501.0
======== ======== ======== ========
Gross profit percent 33.2% 22.2% 49.3%
======== ======== ========
Operating income
percent 5.8% 0.0% 15.2%
======== ======== ========
Six Months Ended
June 30, 2001
------------------
Customer revenue $3,085.2 $2,260.4 $824.8
Intersegment ($165.0) 31.5 133.5
-------- -------- -------- --------
Total revenue $3,085.2 ($165.0) $2,291.9 $958.3
======== ======== ======== ========
Gross profit percent 26.7% 18.7% 43.3%
======== ======== ========
Operating income
percent 4.9% 1.6% 14.1%
======== ======== ========
Six Months Ended
June 30, 2000
------------------
Customer revenue $2,953.6 $2,049.6 $904.0
Intersegment ($223.5) 33.5 190.0
-------- -------- -------- --------
Total revenue $2,953.6 ($223.5) $2,083.1 $1,094.0
======== ======== ======== ========
Gross profit percent 34.1% 22.3% 50.3%
======== ======== ========
Operating income
percent 8.8% 1.0% 20.5%
======== ======== ========
UNISYS CORPORATION
SUPPLEMENTAL SUMMARY
(Millions)
Elimi-
Total nations Services Technology
-------- -------- -------- ----------
Three Months Ended
June 30, 2001
------------------
Customer revenue $1,461.4 $1,084.7 $376.7
Intersegment ($82.9) 18.2 64.7
-------- -------- -------- --------
Total revenue $1,461.4 ($82.9) $1,102.9 $441.4
======== ======== ======== ========
Gross profit percent 27.2% 19.2% 43.5%
======== ======== ========
Operating income
percent 3.1% 0.9% 10.5%
======== ======== ========
Three Months Ended
June 30, 2000
------------------
Customer revenue $1,597.1 $1,128.9 $468.2
Intersegment ($109.8) 13.6 96.2
-------- -------- -------- --------
Total revenue $1,597.1 ($109.8) $1,142.5 $564.4
======== ======== ======== ========
Gross profit percent 30.1% 20.5% 44.1%
======== ======== ========
Operating income
percent 5.0% 0.0% 13.4%
======== ======== ========
Six Months Ended
June 30, 2001
------------------
Customer revenue $3,085.2 $2,260.4 $824.8
Intersegment ($165.0) 31.5 133.5
-------- -------- -------- --------
Total revenue $3,085.2 ($165.0) $2,291.9 $958.3
======== ======== ======== ========
Gross profit percent 26.7% 18.7% 43.3%
======== ======== ========
Operating income
percent 4.9% 1.6% 14.1%
======== ======== ========
Six Months Ended
June 30, 2000
------------------
Customer revenue $3,265.8 $2,253.9 $1,011.9
Intersegment ($233.9) 24.6 209.3
-------- -------- -------- --------
Total revenue $3,265.8 ($233.9) $2,278.5 $1,221.2
======== ======== ======== ========
Gross profit percent 31.2% 20.8% 45.3%
======== ======== ========
Operating income
percent 7.8% 0.9% 17.9%
======== ======== ========
UNISYS CORPORATION
CONSOLIDATED BALANCE SHEET
(Millions)
June 30, December 31,
2001 2000
---------- ----------
Assets
Current assets
Cash and cash equivalents $244.7 $378.0
Accounts and notes receivable, net 1,040.1 1,247.4
Inventories
Parts and finished equipment 240.7 249.4
Work in process and materials 180.2 176.1
Deferred income taxes 463.4 460.6
Other current assets 109.6 75.5
---------- ----------
Total 2,278.7 2,587.0
---------- ----------
Properties 1,590.0 1,584.1
Less accumulated depreciation 959.7 963.9
---------- ----------
Properties, net 630.3 620.2
---------- ----------
Investments at equity 204.7 225.8
Software, net of accumulated amortization 303.4 296.7
Prepaid pension cost 1,155.9 1,063.0
Deferred income taxes 583.6 583.6
Other assets 461.8 341.4
---------- ----------
Total $5,618.4 $5,717.7
========== ==========
Liabilities and stockholders' equity
Current liabilities
Notes payable $187.2 $209.5
Current maturities of long-term debt 16.0 16.8
Accounts payable 669.4 847.7
Other accrued liabilities 1,166.9 1,323.5
Income taxes payable 279.6 288.3
---------- ----------
Total 2,319.1 2,685.8
---------- ----------
Long-term debt 562.4 536.3
Other liabilities 491.9 309.5
Stockholders' equity
Common stock 3.2 3.2
Accumulated deficit (748.0) (829.4)
Other capital 3,687.8 3,656.0
Accumulated other comprehensive loss (698.0) (643.7)
---------- ----------
Stockholders' equity 2,245.0 2,186.1
---------- ----------
Total $5,618.4 $5,717.7
========== ==========
UNISYS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions)
Six Months Ended
June 30
-----------------
2001 2000
------ ------
Cash flows from operating activities
Income before extraordinary items $98.6 $162.8
Add (deduct) items to reconcile
income before extraordinary items
to net cash provided by (used for)
operating activities:
Extraordinary items (17.2) (19.8)
Depreciation 68.7 71.6
Amortization:
Marketable software 61.0 59.0
Goodwill 4.1 5.4
(Increase) in deferred income
taxes, net (2.8) (8.7)
Decrease in receivables, net 100.2 94.4
Decrease (increase) in inventories 4.7 (26.5)
(Decrease) in accounts payable
and other accrued liabilities (352.9) (397.4)
(Decrease) increase in income taxes payable (8.7) 4.2
Increase (decrease) in other liabilities 186.4 (2.6)
(Increase) in other assets (145.4) (60.6)
Other 13.3 8.3
------- -------
Net cash provided by (used for)
operating activities 10.0 (109.9)
------- -------
Cash flows from investing activities
Proceeds from investments 1,056.6 343.5
Purchases of investments (1,042.6) (296.8)
Investment in marketable software (67.8) (67.6)
Capital additions of properties (84.5) (83.1)
Purchases of businesses (2.2) (10.9)
Proceeds from sales of properties 11.3
------- -------
Net cash used for investing activities (140.5) (103.6)
------- -------
Cash flows from financing activities
Proceeds from issuance of long-term debt 341.2
Payments of long-term debt (342.3) (444.6)
Net (reduction in) proceeds from
short-term borrowings (22.3) 354.3
Proceeds from employee stock plans 19.0 33.7
------- -------
Net cash used for financing activities (4.4) (56.6)
------- -------
Effect of exchange rate changes on cash
and cash equivalents 1.6 (11.4)
------- -------
Decrease in cash and cash equivalents (133.3) (281.5)
Cash and cash equivalents, beginning of
period 378.0 464.0
------- -------
Cash and cash equivalents, end of period $244.7 $182.5
======= =======
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