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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 0.0% 8.51 0.00 01:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Software & Computer Services 2,825.0 143.2 148.0 5.8 360

Unisys Corp 3rd Quarter Results

30/10/2019 7:00am

UK Regulatory (RNS & others)


 
TIDMUSY 
 
Unisys Announces 3Q19 Results; Revenue Growth and Margin Expansion Continue; 
        Company Increases Full-Year Non-GAAP Adjusted Revenue Guidance 
 
BLUE BELL, Pa., Oct. 29, 2019 /PRNewswire/ -- 
 
  * Total revenue grew 10.1% year over year (11.8% on a constant-currency(1) 
    basis) 
      + Total non-GAAP adjusted revenue(3) grew 9.6% year over year, 
        representing the sixth-consecutive quarter of year-over-year growth 
  * Operating profit margin expanded 130 basis points year over year to 9.4% 
      + Non-GAAP operating profit(4) margin expanded 100 basis points year over 
        year to 8.7% 
  * EPS was a loss of $0.23 per share relative to a gain of $0.12 per share in 
    the prior-year period (current period includes a $20.2 million or $0.35 per 
    share charge related to the convertible note transaction) 
      + Non-GAAP diluted EPS(10) was up 25.6% year over year to $0.49 per share 
  * Operating cash flow grew $33.2 million year over year to $17.7 million 
      + Adjusted free cash flow(12) grew $41.9 million year over year to $35.5 
        million 
  * Company increases full-year 2019 non-GAAP adjusted revenue guidance from 2 
    to 5%, to 3 to 7% year-over-year growth and reaffirms full-year guidance 
    for non-GAAP operating profit margin and adjusted EBITDA margin 
 
Unisys Corporation (NYSE: UIS) today reported third-quarter 2019 financial 
results, increased full-year non-GAAP adjusted revenue guidance from 2 to 5% 
year-over-year growth, to 3 to 7% year-over-year growth and reaffirmed 
full-year guidance for non-GAAP operating profit margin and adjusted EBITDA 
margin. "We are pleased to see continued revenue growth and margin expansion 
for the company overall this quarter," said Unisys Chairman and CEO Peter A. 
Altabef. "Our U.S. Federal business saw strong revenue growth, and our 
Enterprise Solutions business helped drive our profitability expansion year 
over year." 
 
Third-Quarter Highlights 
 
                        Revenue Growth                                 Profitability 
 
                  Revenue Services Technology           Operating      Net        Adj.      Diluted 
                  Growth  Revenue   Revenue              Profit       Income     EBITDA       EPS 
                           Growth    Growth              Margin       Margin     Margin 
 
GAAP                10.1%     8.0%      25.2%  GAAP          9.4%     (1.7%)                ($0.23) 
 
Constant-Currency   11.8%     9.9%      26.0%   YoY           130 bps  (260) bps                N/A 
(GAAP)                                          Change 
 
Non-GAAP             9.6%     7.4%             Non-GAAP      8.7%       4.3%      14.1%       $0.49 
 
                                                YoY           100 bps     80 bps     10 bps   25.6% 
                                                Change 
 
U.S. Federal        53.6% 
Sector 
 
Summary of Third-Quarter 2019 Business Results 
 
Company: 
 
Third-quarter 2019 revenue grew 10.1% year over year to $757.6 million versus 
$688.3 million in the prior-year period (11.8% growth on a constant-currency 
basis). Non-GAAP adjusted revenue grew 9.6% to $750.8 million, representing the 
sixth-consecutive quarter of year-over-year non-GAAP adjusted revenue growth. 
U.S. Federal sector revenue grew 53.6% year over year, the highest quarterly 
rate in over 15 years. 
 
Operating profit margin in the third quarter expanded 130 basis points year 
over year to 9.4%, versus 8.1% in the prior-year period. Non-GAAP operating 
profit margin expanded 100 basis points year over year to 8.7%. 
 
Net loss for the third quarter 2019 was $13.2 million versus net income of $6.1 
million in the prior-year period (current period includes a $20.2 million 
charge related to the convertible note transaction). As a result of this 
charge, which had a $0.35 per share impact, the loss per share was $0.23, 
compared to earnings per share of $0.12 in the prior-year period. Non-GAAP 
diluted earnings per share was up 25.6% year over year to $0.49 per share 
versus $0.39 per share in the prior-year period. 
 
Adjusted EBITDA(9) increased 10.5% year over year to $106.2 million. Net income 
margin was (1.7)%, compared to 0.9% in the prior-year period, with the 
year-over-year decline due to the charge related to the convertible note 
transaction. Adjusted EBITDA margin expanded 10 basis points year over year to 
14.1%, versus 14.0% in the prior-year period. 
 
Operating cash flow in the third quarter was up $33.2 million year over year to 
$17.7 million, versus a use of cash of $15.5 million in the prior-year period. 
Free cash flow(11) was up $48.9 million year over year to $(14.3) million, 
compared to $(63.2) million in the prior-year period. Adjusted free cash flow 
was up $41.9 million year over year to $35.5 million, versus a use of cash of 
$6.4 million in the prior-year period. At September 30, 2019, the company had 
$425.4 million in cash and cash equivalents. 
 
Services: 
 
Services revenue grew 8.0% year over year in the third quarter (or 9.9% in 
constant-currency) to $654.1 million, representing the sixth-consecutive 
quarter of year-over-year growth for the segment. Services non-GAAP adjusted 
revenue grew 7.4% year over year to $647.3 million. Services gross profit 
margin was up 170 basis points year over year to 17.6%, and Services operating 
profit margin was up 240 basis points year over year to 5.5%. Non-GAAP adjusted 
Services gross profit(5) margin was up 140 basis points year over year to 
16.8%, and non-GAAP adjusted Services operating profit(6) margin was up 190 
basis points year over year to 4.5%. Services backlog(2) was $4.2 billion, 
relative to $4.9 billion in the prior-year period.  The growth rate in the 
prior-year period represented the highest growth in this metric since 1999. 
Inclusive of the unfunded portion of U.S. Federal Services backlog, Services 
backlog was up year over year. 
 
Technology: 
 
Technology revenue was up 25.2% year over year to $103.5 million (up 26.0% in 
constant currency). During the quarter, there was a large Technology contract 
in the U.S. Federal sector that had a significant third-party component, which 
impacted margins for the segment. As a result, Technology gross profit margin 
was 51.1% compared to 62.4% in the prior-year period, while Technology 
operating profit margin was 33.0% versus 39.7% in the prior-year period. There 
were no non-GAAP adjustments in the Technology segment in the current or 
prior-year quarter. 
 
Select Third-Quarter Contract Signings: 
 
In the third quarter, the company entered into several contracts in each of its 
sectors including the following: 
 
  * U.S. Federal: In the third quarter, U.S. Defense Information Systems Agency 
    (DISA), the agency that provides enterprise IT supporting the full spectrum 
    of military operations, selected Unisys for the 4th Estate Global Service 
    Center contract to optimize, modernize and consolidate service desk and 
    field services for U.S. Department of Defense agencies in the U.S. and 
    overseas. Under the contract, Unisys will deliver capabilities of its 
    InteliServeT platform of service desk managed services. The contract, worth 
    up to $214 million, will serve 19 of the Defense Department's "4th Estate" 
    organizations, a group of agencies and field activities that reside outside 
    of the military branches and provide support functions critical to military 
    services. 
  * Public: The Queensland Department of Transport and Main Roads (TMR) in 
    Australia has expanded its contract with Unisys to provide facial image 
    processing technology and services for the state's smart card driver 
    license. Unisys will provide TMR's new Facial Signature Image Processing 
    system based on the Unisys Stealth(identity)T multi-factor identity 
    management and authentication solution. Stealth(identity) automates the 
    process of biometric enrollment - capturing biometric data used to 
    authenticate identities - and provides configurable application programming 
    interfaces to integrate biometric authentication across physical and 
    digital channels, including mobile devices. 
  * Commercial: Unisys signed a contract in the third quarter to help MAB Kargo 
    Sdn Bhd (MASkargo), the cargo division of Malaysia Airlines, expand its 
    range of cargo booking options with a new online booking service allowing 
    all types of customers to conveniently access the airline's cargo services, 
    anytime and anywhere, via the airline's website. Unisys will provide 
    Digi-Connect systems integration services to link the airline's website to 
    the core Unisys DigisticsT air cargo digital logistics management solution. 
    This will enable real-time access to MASkargo's cargo capacity, rates and 
    tracking via XML/API connectivity to ensure an omnichannel experience 
    regardless of which online method is used. 
  * Financial Services: Bancolombia signed a contract with Unisys, including 
    using our InteliServeT offering, to provide a wide range of secure digital 
    workplace services, help desk and field services. 
 
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) 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-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.: 1029/9721 
 
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    Nine Months Ended 
                                                Ended          September 30, 
                                            September 30, 
 
                                            2019     2018      2019      2018 
 
Revenue 
 
Services                                     $        $             $         $ 
                                             654.1    605.6   1,919.6   1,760.8 
 
Technology                                   103.5     82.7     287.6     303.3 
 
                                             757.6    688.3   2,207.2   2,064.1 
 
Costs and expenses 
 
Cost of revenue: 
 
Services                                     536.1    504.9   1,582.8   1,460.0 
 
Technology                                    49.1     29.6     108.2      96.2 
 
                                             585.2    534.5   1,691.0   1,556.2 
 
Selling, general and administrative           95.6     90.9     293.3     274.5 
 
Research and development                       5.9      7.1      22.1      21.8 
 
                                             686.7    632.5   2,006.4   1,852.5 
 
Operating profit                              70.9     55.8     200.8     211.6 
 
Interest expense                              15.2     15.9      46.9      48.2 
 
Other income (expense), net                 (49.2)   (17.7)   (108.5)    (58.3) 
 
Income before income taxes                     6.5     22.2      45.4     105.1 
 
Provision for income taxes                    15.9     15.2      41.8      50.4 
 
Consolidated net income (loss)               (9.4)      7.0       3.6      54.7 
 
Net income attributable to noncontrolling      3.8      0.9      10.0       4.2 
interests 
 
Net income (loss) attributable to Unisys   $        $           (6.4)   $ 
Corporation common shareholders             (13.2)      6.1                50.5 
 
Earnings (loss) per share attributable to 
Unisys Corporation 
 
Basic                                      $        $         $         $ 
                                            (0.23)     0.12    (0.12)      0.99 
 
Diluted                                    $        $         $         $ 
                                            (0.23)     0.12    (0.12)      0.89 
 
Shares used in the per share computations 
(in thousands): 
 
Basic                                       58,245   51,021    53,815    50,918 
 
Diluted                                     58,245   51,718    53,815    73,265 
 
 
 
                              UNISYS CORPORATION 
 
                                SEGMENT RESULTS 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                               Total     Eliminations    Services   Technology 
 
Three Months Ended September 
30, 2019 
 
Customer revenue                $        $                 $            $ 
                                  757.6              -       654.1        103.5 
 
Intersegment                          -          (2.3)           -          2.3 
 
Total revenue                   $          $               $            $ 
                                  757.6          (2.3)       654.1        105.8 
 
Gross profit percent             22.8 %                     17.6 %       51.1 % 
 
Operating profit percent          9.4 %                      5.5 %       33.0 % 
 
Three Months Ended September 
30, 2018 
 
Customer revenue                $        $                 $          $ 
                                  688.3              -       605.6         82.7 
 
Intersegment                          -          (4.3)           -          4.3 
 
Total revenue                   $          $               $          $ 
                                  688.3          (4.3)       605.6         87.0 
 
Gross profit percent             22.3 %                     15.9 %       62.4 % 
 
Operating profit percent          8.1 %                      3.1 %       39.7 % 
 
                               Total     Eliminations    Services   Technology 
 
Nine Months Ended September 
30, 2019 
 
Customer revenue                  $      $                   $          $ 
                                2,207.2              -     1,919.6        287.6 
 
Intersegment                          -          (6.8)           -          6.8 
 
Total revenue                     $        $                 $          $ 
                                2,207.2          (6.8)     1,919.6        294.4 
 
Gross profit percent             23.4 %                     17.0 %       60.9 % 
 
Operating profit percent          9.1 %                      4.7 %       40.6 % 
 
Nine Months Ended September 
30, 2018 
 
Customer revenue                  $      $                   $          $ 
                                2,064.1              -     1,760.8        303.3 
 
Intersegment                          -         (18.3)           -         18.3 
 
Total revenue                     $          $               $          $ 
                                2,064.1         (18.3)     1,760.8        321.6 
 
Gross profit percent             24.6 %                     16.3 %       66.7 % 
 
Operating profit percent         10.3 %                      3.1 %       48.1 % 
 
 
 
                              UNISYS CORPORATION 
 
                          CONSOLIDATED BALANCE SHEETS 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                          September 30,        December 31, 
                                               2019                2018 
 
Assets 
 
Current assets: 
 
Cash and cash equivalents                    $                   $ 
                                                     425.4               605.0 
 
Accounts receivable, net                             504.4               509.2 
 
Contract assets                                       38.3                29.7 
 
Inventories: 
 
Parts and finished equipment                          15.0                14.0 
 
Work in process and materials                         13.2                13.3 
 
Prepaid expenses and other current                   122.7               130.2 
assets 
 
Total current assets                               1,119.0             1,301.4 
 
Properties                                           799.0               800.2 
 
Less-Accumulated depreciation and                    676.6               678.9 
amortization 
 
Properties, net                                      122.4               121.3 
 
Outsourcing assets, net                              208.3               216.4 
 
Marketable software, net                             183.3               162.1 
 
Operating lease right-of-use assets                  126.8                   - 
 
Prepaid postretirement assets                        150.4               147.6 
 
Deferred income taxes                                102.0               109.3 
 
Goodwill                                             176.2               177.8 
 
Restricted cash                                        7.9                19.1 
 
Other long-term assets                               209.5               202.6 
 
Total assets                                   $                   $ 
                                                   2,405.8             2,457.6 
 
Liabilities and deficit 
 
Current liabilities: 
 
Current maturities of long-term-debt       $                   $ 
                                                      13.4                10.0 
 
Accounts payable                                     240.6               268.9 
 
Deferred revenue                                     236.0               294.4 
 
Other accrued liabilities                            362.9               350.0 
 
Total current liabilities                            852.9               923.3 
 
Long-term debt                                       563.6               642.8 
 
Long-term postretirement liabilities               1,830.5             1,956.5 
 
Long-term deferred revenue                           142.4               157.2 
 
Long-term operating lease liabilities                 83.8                   - 
 
Other long-term liabilities                           50.0                77.4 
 
Commitments and contingencies 
 
Total deficit                                    (1,117.4)           (1,299.6) 
 
Total liabilities and deficit                  $                   $ 
                                                   2,405.8             2,457.6 
 
 
 
                              UNISYS CORPORATION 
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                                            Nine Months Ended 
                                                              September 30, 
 
                                                             2019       2018 
 
Cash flows from operating activities 
 
Consolidated net income                                    $            $ 
                                                                 3.6       54.7 
 
Adjustments to reconcile consolidated net income to net 
cash used for operating activities: 
 
Foreign currency transaction losses                              7.2        1.1 
 
Non-cash interest expense                                        7.5        7.8 
 
Loss on debt exchange                                           20.2          - 
 
Employee stock compensation                                     10.1       10.0 
 
Depreciation and amortization of properties                     26.7       31.2 
 
Depreciation and amortization of outsourcing assets             47.3       48.7 
 
Amortization of marketable software                             35.0       42.8 
 
Other non-cash operating activities                            (0.8)      (2.6) 
 
Loss on disposal of capital assets                               1.3        0.6 
 
Gain on sale of properties                                         -      (7.3) 
 
Postretirement contributions                                  (82.3)    (124.5) 
 
Postretirement expense                                          71.5       58.2 
 
Decrease in deferred income taxes, net                           1.0        9.3 
 
Changes in operating assets and liabilities: 
 
Receivables, net                                              (17.4)     (69.3) 
 
Inventories                                                    (1.7)      (1.3) 
 
Accounts payable and other accrued liabilities               (173.4)    (144.1) 
 
Other liabilities                                               33.1      (1.5) 
 
Other assets                                                     9.3        8.8 
 
Net cash used for operating activities                         (1.8)     (77.4) 
 
Cash flows from investing activities 
 
Proceeds from investments                                    2,824.9    2,889.3 
 
Purchases of investments                                   (2,835.8)  (2,892.4) 
 
Investment in marketable software                             (56.2)     (61.7) 
 
Capital additions of properties                               (29.1)     (25.0) 
 
Capital additions of outsourcing assets                       (44.4)     (54.4) 
 
Net proceeds from sale of properties                           (0.2)       19.2 
 
Other                                                          (0.9)      (0.9) 
 
Net cash used for investing activities                       (141.7)    (125.9) 
 
Cash flows from financing activities 
 
Cash paid in connection with debt exchange                    (56.3)          - 
 
Proceeds from capped call transactions                           7.2          - 
 
Proceeds from issuance of long-term debt                        28.6          - 
 
Payments of long-term debt                                    (12.2)      (2.0) 
 
Financing fees                                                     -      (0.2) 
 
Other                                                          (4.6)      (2.2) 
 
Net cash used for financing activities                        (37.3)      (4.4) 
 
Effect of exchange rate changes on cash, cash equivalents     (10.0)     (22.5) 
and restricted cash 
 
Decrease in cash, cash equivalents and restricted cash       (190.8)    (230.2) 
 
Cash, cash equivalents and restricted cash, beginning of       624.1      764.1 
period 
 
Cash, cash equivalents and restricted cash, end of period      $          $ 
                                                               433.3      533.9 
 
 
 
                              UNISYS CORPORATION 
 
        RECONCILIATIONS OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES 
 
                                  (Unaudited) 
 
                       (Millions, except per share data) 
 
                                               Three Months      Nine Months 
                                                  Ended             Ended 
 
                                              September 30,     September 30, 
 
                                              2019     2018     2019     2018 
 
GAAP net income (loss) attributable to       $        $        $        $ 
Unisys Corporation common shareholders        (13.2)      6.1              50.5 
                                                                 (6.4) 
 
Topic 606 adjustment:        pretax                -        -        -   (53.0) 
 
                             tax                   -        -        -      5.3 
 
                             net of tax            -        -        -   (47.7) 
 
Postretirement expense:      pretax             24.4     19.7     71.5     58.2 
 
                             tax                 0.1      0.3      0.2      0.8 
 
                             net of tax         24.5     20.0     71.7     59.0 
 
Debt exchange, cost          pretax             18.4    (4.0)     29.0    (6.2) 
reduction and other 
expenses: 
 
                             tax               (0.8)      0.1    (1.8)      0.2 
 
                             net of tax         17.6    (3.9)     27.2    (6.0) 
 
                             minority            3.4      1.5      6.6      1.5 
                             interest 
 
                             net of             21.0    (2.4)     33.8    (4.5) 
                             minority 
                             interest 
 
Non-GAAP net income attributable to Unisys      32.3     23.7     99.1     57.3 
Corporation common shareholders 
 
Add interest expense on convertible notes        3.2      4.9     13.2     14.6 
 
Non-GAAP net income attributable to Unisys   $        $        $        $ 
Corporation for diluted earnings per share      35.5     28.6    112.3     71.9 
 
Weighted average shares (thousands)           58,245   51,021   53,815   50,918 
 
Plus incremental shares from assumed 
conversion: 
 
                             Employee stock      341      697      395      479 
                             plans 
 
                             Convertible      13,951   21,868   19,229   21,868 
                             notes 
 
Non-GAAP adjusted weighted average shares     72,537   73,586   73,439   73,265 
 
Diluted earnings (loss) per share 
 
GAAP basis 
 
GAAP net income (loss) attributable to       $        $        $        $ 
Unisys Corporation for diluted earnings per   (13.2)      6.1              65.1 
share                                                            (6.4) 
 
Divided by adjusted weighted average shares   58,245   51,718   53,815   73,265 
 
GAAP diluted earnings (loss) per share       $        $        $        $ 
                                              (0.23)     0.12   (0.12)     0.89 
 
Non-GAAP basis 
 
Non-GAAP net income attributable to Unisys   $        $        $        $ 
Corporation for diluted earnings per share      35.5     28.6    112.3     71.9 
 
Divided by Non-GAAP adjusted weighted         72,537   73,586   73,439   73,265 
average shares 
 
Non-GAAP diluted earnings per share          $        $        $        $ 
                                                0.49     0.39     1.53     0.98 
 
 
 
                              UNISYS CORPORATION 
 
                     RECONCILIATIONS OF GAAP TO NON-GAAP 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                FREE CASH FLOW 
 
                                  Three Months Ended      Nine Months Ended 
 
                                     September 30,          September 30, 
 
                                   2019        2018        2019        2018 
 
Cash provided by (used for)        $           $         $             $ 
operations                            17.7      (15.5)       (1.8)      (77.4) 
 
Additions to marketable             (19.0)      (20.6)      (56.2)      (61.7) 
software 
 
Additions to properties              (8.3)      (15.1)      (29.1)      (25.0) 
 
Additions to outsourcing assets      (4.7)      (12.0)      (44.4)      (54.4) 
 
Free cash flow                      (14.3)      (63.2)     (131.5)     (218.5) 
 
Postretirement funding                34.6        51.6        82.3       124.5 
 
Cost reduction and other              15.2         5.2        37.1        32.2 
payments, net of reimbursements 
 
Adjusted free cash flow            $         $             $           $ 
                                      35.5       (6.4)      (12.1)      (61.8) 
 
 
 
                              UNISYS CORPORATION 
 
                      RECONCILIATIONS OF GAAP TO NON-GAAP 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                    EBITDA 
 
                                       Three Months Ended    Nine Months Ended 
 
                                         September 30,         September 30, 
 
                                        2019       2018       2019       2018 
 
Net income (loss) attributable to       $        $          $           $ 
Unisys Corporation common                (13.2)        6.1      (6.4)      50.5 
shareholders 
 
Net income attributable to                  3.8        0.9       10.0       4.2 
noncontrolling interests 
 
Interest expense, net of interest          12.4       13.2       38.3      39.2 
income of $2.8, $2.7, $8.6, $9.0 
respectively* 
 
Provision for income taxes                 15.9       15.2       41.8      50.4 
 
Depreciation                               24.5       26.4       74.0      79.9 
 
Amortization                               13.4       14.2       35.0      42.8 
 
EBITDA                                  $          $            $         $ 
                                           56.8       76.0      192.7     267.0 
 
Topic 606 adjustment                  $          $          $           $ 
                                              -          -          -    (53.0) 
 
Postretirement expense                     24.4       19.7       71.5      58.2 
 
Debt exchange, cost reduction and          18.4      (4.0)       27.9     (6.2) 
other expenses** 
 
Non-cash share based expense                2.8        2.7       10.1      10.0 
 
Other (income) expense adjustment***        3.8        1.7       14.9      12.0 
 
Adjusted EBITDA                           $        $            $         $ 
                                          106.2       96.1      317.1     288.0 
 
*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 debt 
exchange, cost reduction and other expenses 
 
                                       Three Months Ended    Nine Months Ended 
 
                                         September 30,         September 30, 
 
                                        2019       2018       2019       2018 
 
Revenue                                   $          $              $         $ 
                                          757.6      688.3    2,207.2   2,064.1 
 
Non-GAAP revenue                          $          $              $         $ 
                                          750.8      685.2    2,191.9   2,008.0 
 
Net income as a percentage of            (1.7)%      0.9 %     (0.3)%     2.4 % 
revenue 
 
Non-GAAP net income as a percentage       4.3 %      3.5 %      4.5 %     2.9 % 
of Non-GAAP revenue 
 
Adjusted EBITDA as a percentage of       14.1 %     14.0 %     14.5 %    14.3 % 
Non-GAAP revenue 
 
 
 
                              UNISYS CORPORATION 
 
    RECONCILIATIONS OF GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                Three Months Ended        Nine Months Ended 
 
Services Segment                  September 30,             September 30, 
 
                                2019         2018         2019         2018 
 
GAAP total revenue                 $            $      $   1,919.6  $   1,760.8 
                                   654.1        605.6 
 
Restructuring                      (6.8)        (3.1)       (15.3)        (3.1) 
reimbursement 
 
Non-GAAP revenue                   $            $      $   1,904.3  $   1,757.7 
                                   647.3        602.5 
 
GAAP gross margin                  $          $              $            $ 
                                   115.4         96.1        325.9        286.9 
 
Restructuring                      (6.8)        (3.1)       (15.3)        (3.1) 
reimbursement 
 
Non-GAAP gross margin              $          $              $            $ 
                                   108.6         93.0        310.6        283.8 
 
GAAP operating profit            $            $            $            $ 
                                    36.1         18.6         90.5         54.3 
 
Restructuring                      (6.8)        (3.1)       (15.3)        (3.1) 
reimbursement 
 
Non-GAAP operating profit        $            $            $            $ 
                                    29.3         15.5         75.2         51.2 
 
GAAP gross margin %                17.6%        15.9%        17.0%        16.3% 
 
Non-GAAP gross margin %            16.8%        15.4%        16.3%        16.1% 
 
GAAP operating profit %             5.5%         3.1%         4.7%         3.1% 
 
Non-GAAP operating profit %         4.5%         2.6%         3.9%         2.9% 
 
                                Three Months Ended        Nine Months Ended 
 
Technology Segment                September 30,             September 30, 
 
                                2019         2018         2019         2018 
 
GAAP total revenue                 $          $              $            $ 
                                   105.8         87.0        294.4        321.6 
 
Topic 606 adjustment                   -            -            -       (53.0) 
 
Non-GAAP revenue                   $          $              $            $ 
                                   105.8         87.0        294.4        268.6 
 
GAAP gross margin                $            $              $            $ 
                                    54.1         54.3        179.4        214.4 
 
Topic 606 adjustment                   -            -            -       (53.0) 
 
Non-GAAP gross margin            $            $              $            $ 
                                    54.1         54.3        179.4        161.4 
 
GAAP operating profit            $            $              $            $ 
                                    34.9         34.5        119.4        154.7 
 
Topic 606 adjustment                   -            -            -       (53.0) 
 
Non-GAAP operating profit        $            $              $            $ 
                                    34.9         34.5        119.4        101.7 
 
GAAP gross margin %                51.1%        62.4%        60.9%        66.7% 
 
Non-GAAP gross margin %            51.1%        62.4%        60.9%        60.1% 
 
GAAP operating profit %            33.0%        39.7%        40.6%        48.1% 
 
Non-GAAP operating profit %        33.0%        39.7%        40.6%        37.9% 
 
                              UNISYS CORPORATION 
 
    RECONCILIATIONS OF GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                Three Months Ended        Nine Months Ended 
 
Total Unisys                      September 30,             September 30, 
 
                                2019         2018         2019         2018 
 
GAAP total revenue                 $            $      $   2,207.2  $   2,064.1 
                                   757.6        688.3 
 
Topic 606 adjustment                   -            -            -       (53.0) 
 
Restructuring                      (6.8)        (3.1)       (15.3)        (3.1) 
reimbursement 
 
Non-GAAP revenue                   $            $      $   2,191.9  $   2,008.0 
                                   750.8        685.2 
 
GAAP gross margin                  $            $            $            $ 
                                   172.4        153.8        516.2        507.9 
 
Topic 606 adjustment                   -            -            -       (53.0) 
 
Restructuring                      (6.8)        (3.1)       (15.3)        (3.1) 
reimbursement 
 
Cost reduction expense             (1.9)        (0.7)        (6.7)        (4.2) 
 
Non-GAAP gross margin              $            $            $            $ 
                                   163.7        150.0        494.2        447.6 
 
GAAP operating profit            $            $              $            $ 
                                    70.9         55.8        200.8        211.6 
 
Topic 606 adjustment                   -            -            -       (53.0) 
 
Restructuring                      (6.8)        (3.1)       (15.3)        (3.1) 
reimbursement 
 
Postretirement expense               0.9          1.0          2.5          2.9 
 
Cost reduction and other             0.5        (0.9)         11.1        (3.1) 
expense 
 
Non-GAAP operating profit        $            $              $            $ 
                                    65.5         52.8        199.1        155.3 
 
GAAP gross margin %                22.8%        22.3%        23.4%        24.6% 
 
Non-GAAP gross margin %            21.8%        21.9%        22.5%        22.3% 
 
GAAP operating profit %             9.4%         8.1%         9.1%        10.3% 
 
Non-GAAP operating profit %         8.7%         7.7%         9.1%         7.7% 
 
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

October 30, 2019 03:00 ET (07:00 GMT)

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