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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 Full year/4th quarter financial results

26/02/2020 7:00am

UK Regulatory (RNS & others)


 
TIDMUSY 
 
Unisys Announces Full-Year and 4Q19 Results; Achieves All Guided Metrics 
 
BLUE BELL, Pa., Feb. 25, 2020 -- 
 
  * Total 2019 revenue grew 4.4% year over year (7.0% on a constant-currency(1) 
    basis) 
      + Total 2019 non-GAAP adjusted revenue(3) grew 6.1% year over year, 
        representing the second-consecutive year of year-over-year growth and 
        the highest annual growth since 1998 
  * 2019 operating profit margin of 8.1% versus 10.1% in prior-year period 
    (reflective of 180 basis points of additional operating profit margin that 
    resulted from the revenue recorded upon adoption of ASC 606 in 1Q18) 
      + 2019 non-GAAP operating profit(4) margin expanded 10 basis points year 
        over year to 9.0% 
  * 2019 Services operating profit margin expanded 140 basis points year over 
    year to 4.2% 
      + 2019 non-GAAP adjusted Services operating profit(6) margin expanded 120 
        basis points year over year to 3.6% 
  * 2019 operating cash flow grew $50.0 million year over year to $123.9 
    million 
      + 2019 adjusted free cash flow(12) grew $65.0 million year over year to 
        $127.0 million 
  * Company achieves guidance ranges for all guided metrics 
  * The company recently announced the sale of its U.S. Federal business. For 
    details related to this sale, please see press release and other materials 
    on the company's Investor Relations website 
 
Unisys Corporation (NYSE: UIS) today reported full-year and fourth-quarter 2019 
financial results and that it has achieved guidance on all provided metrics. 
"The company had a very strong year. We grew non-GAAP adjusted revenue at the 
highest annual rate since 1998 and grew both Services revenue and margins year 
over year," said Unisys Chairman and CEO Peter A. Altabef. "Our cash flow 
metrics also improved year over year." 
 
Full-Year 2019 Highlights 
 
                        Revenue Growth                                 Profitability 
 
                  Revenue Services Technology           Operating        Net       Adj.     Diluted 
                   Growth  Revenue    Revenue              Profit     Income     EBITDA         EPS 
                            Growth     Growth              Margin     Margin     Margin 
 
GAAP                 4.4%     7.0%     (9.7%)  GAAP          8.1%     (0.6%)                ($0.31) 
 
Constant-Currency    7.0%     9.5%     (7.1%)   YoY         (200) bps  (330) bps                N/A 
(GAAP)                                          Change 
 
Non-GAAP             6.1%     6.7%       2.7%  Non-GAAP      9.0%       4.8%      14.4%       $2.12 
 
                                                YoY            10 bps     30 bps   (90) bps    8.7% 
                                                Change 
 
Summary of Full-Year 2019 Business Results 
Company: 
2019 revenue grew 4.4% year over year to $2.95 billion versus $2.83 billion in 
2018 (7.0% growth on a constant-currency basis). Non-GAAP adjusted revenue grew 
6.1% to $2.93 billion, representing the second-consecutive year of 
year-over-year non-GAAP adjusted revenue growth, and the highest annual growth 
rate since 1998. U.S. Federal sector revenue grew 26.5% year over year, the 
highest annual rate since 2003. 
 
2019 operating profit was $238.2 million, versus $284.1 million in 2018 
(reflective of the additional $53.0 million of operating profit recorded upon 
adoption of ASC 606 in 1Q18). Non-GAAP operating profit was up 7.1% year over 
year to $262.7 million. Total company 2019 operating profit margin was 8.1%, 
versus 10.1% in 2018 (reflective of 180 basis points of additional operating 
profit margin that resulted from the revenue recorded upon adoption of ASC 606 
in 1Q18). Total company non-GAAP operating profit margin was up 10 basis points 
year over year to 9.0%. 
 
Net loss for 2019 was $17.2 million versus net income of $75.5 million in 2018. 
As noted above, $53.0 million of this difference is a result of the operating 
profit recorded upon adoption of ASC 606 in 1Q18. The 2019 net loss also 
reflects a $20.1 million charge related to the convertible note transaction, 
along with post-retirement expense that was $12.8 million higher year over 
year, and a $13.0 million charge related to costs to close out the remediation 
of a site the company no longer operates. As a result of these items, the loss 
per share was $0.31, compared to earnings per diluted share of $1.30 in the 
prior-year period. Non-GAAP diluted earnings per share(10) was up 8.7% year 
over year to $2.12 per share versus $1.95 per share in 2018. 
 
Adjusted EBITDA(9) was $422.2 million, roughly flat relative to $422.5 million 
in 2018. Net income margin was (0.6)%, compared to 2.7% in 2018, with the 
year-over-year decline due to the flow-through of higher operating profit in 
2018 resulting from the revenue recorded upon adoption of ASC 606, higher 
pension expense in 2019 and the other one-time items highlighted above in 
connection with net income/(loss). Adjusted EBITDA margin was in line with 
guidance at 14.4%, versus 15.3% in 2018. The decline in adjusted EBITDA margin 
year over year, relative to the increase in non-GAAP operating profit margin 
was driven by a change in depreciation and amortization due a longer assumed 
useful life for ClearPath Forward® software. 
 
2019 cash provided by operations was up $50.0 million year over year to $123.9 
million, versus $73.9 million in 2018. Free cash flow(11) was up $79.5 million 
year over year to $(35.9) million, compared to $(115.4) million in 2018. 
Adjusted free cash flow was up $65.0 million year over year to $127.0 million, 
versus $62.0 million in 2018. At December 31, 2019, the company had $538.8 
million in cash and cash equivalents. 
 
Services: 
Services revenue grew 7.0% year over year in 2019 (or 9.5% in 
constant-currency) to $2.55 billion, representing the seventh-consecutive 
quarter of year-over-year growth for the segment. 2019 Services non-GAAP 
adjusted revenue grew 6.7% year over year to $2.54 billion, the highest annual 
growth rate since 2003. 2019 Services gross profit margin was up 60 basis 
points year over year to 16.6%, and 2019 Services operating profit margin was 
up 140 basis points year over year to 4.2%. 2019 non-GAAP adjusted Services 
gross profit(5) margin was up 40 basis points year over year to 16.0%, and 2019 
non-GAAP adjusted Services operating profit margin was up 120 basis points year 
over year to 3.6%. Services backlog(2) was $4.3 billion, relative to $4.8 
billion at year-end 2018. The company has previously noted that the level of 
Services backlog seen at year-end 2018 was not necessary to support its 
near-term growth expectations. 
 
Technology: 
2019 Technology revenue was $396.0 million, relative to $438.7 million in 2018 
that included $53.0 million of revenue recognized upon the adoption of ASC 606. 
2019 non-GAAP adjusted Technology revenue was up 2.7% year over year to $396.0 
million, relative to $385.7 million in 2018 (up 4.8% in constant currency). 
2019 Technology gross profit margin was 61.8% compared to 69.4% in the 
prior-year period, while Technology operating profit margin was 41.9% versus 
51.3% in 2018 (reflective in part, in both cases of 180 basis points of 
additional operating profit margin that resulted from the revenue recorded upon 
adoption of ASC 606 in 1Q18). 2019 non-GAAP adjusted Technology gross profit 
margin(7) was 61.8% compared to 65.4% in the prior-year period, while non-GAAP 
adjusted Technology operating profit margin(8) was 41.9% versus 45.0% in 2018. 
These year-over-year compares were impacted by more sales of third-party 
hardware in 2019 than in 2018. 
 
Summary of Fourth Quarter 2019 Business Results 
Company: 
Fourth-quarter 2019 revenue was $741.5 million, versus $760.9 million in the 
prior-year period, ((1.4%) on a constant-currency basis). Non-GAAP adjusted 
revenue was $739.3 million, relative to $754.6 million in the prior-year 
period. In both cases, the year-over-year decline was due to Technology 
revenues being more evenly distributed throughout the year in 2019, versus 2018 
which saw lower full-year Technology revenue, but a higher concentration of 
that revenue in the fourth quarter. U.S. Federal sector revenue grew 23.4% year 
over year. 
 
Operating profit margin in the fourth quarter was 5.0%, versus 9.5% in the 
prior-year period. Non-GAAP operating profit margin was 8.6% in the fourth 
quarter, relative to 11.9% in the prior-year period. In both cases, the 
year-over-year decline was largely due to a more even distribution of 
Technology revenue throughout 2019 than in 2018, which saw a higher 
concentration in the fourth quarter. 
 
Net loss for the fourth quarter 2019 was $10.8 million versus net income of 
$25.0 million in the prior-year period, driven largely by the impact of 
Technology noted above. As a result, loss per share was $0.17, compared to 
earnings per diluted share of $0.41 in the prior-year period, and non-GAAP 
earnings per diluted share was $0.60 per share versus $0.97 per share in the 
prior-year period. 
 
Adjusted EBITDA was $105.1 million versus $134.5 million in the prior-year 
period as a result of the timing of Technology revenue as noted above, and net 
income margin was (1.5)%, compared to 3.3% in the prior-year period. Adjusted 
EBITDA margin was 14.2%, versus 17.8% in the prior-year period, with the 
year-over-year decline also resulting from the timing of Technology revenue. 
 
Operating cash flow in the fourth quarter was $125.7 million, versus $151.3 
million in the prior-year period. Free cash flow was $95.6 million, compared to 
$103.1 million in the prior-year period. Adjusted free cash flow was up 12.4% 
year over year to $139.1 million, versus $123.8 million in the prior-year 
period. 
 
Services: 
Services revenue grew 1.2% year over year in the fourth quarter (or 2.4% in 
constant-currency) to $633.1 million, representing the seventh-consecutive 
quarter of year-over-year growth for the segment. Services non-GAAP adjusted 
revenue grew 1.9% year over year to $630.9 million. Services gross profit 
margin was up 50 basis points year over year to 15.5%, and Services operating 
profit margin was up 70 basis points year over year to 2.8%. Non-GAAP adjusted 
Services gross profit margin was up 110 basis points year over year to 15.2%, 
and non-GAAP adjusted Services operating profit margin was up 140 basis points 
year over year to 2.5%. 
 
Technology: 
As noted, non-GAAP adjusted Technology revenue was higher and more evenly 
distributed throughout the year in 2019 than was the case in 2018, which saw 
lower full-year Technology revenue but a higher concentration of that revenue 
in the fourth quarter. As a result, Technology revenue in the fourth quarter 
2019 was $108.4 million, versus $135.4 million in the prior-year period, down 
19.9% (or 18.5% in constant currency). Technology gross profit margin was 64.0% 
compared to 75.5% in the prior-year period largely driven by the more even 
distribution of Technology revenue throughout the year in 2019. Technology 
operating profit margin was 45.2% versus 58.6% in the prior-year period, driven 
by the same factors that influenced Technology gross margin. There were no 
non-GAAP adjustments in the Technology segment in the current or prior-year 
quarter. 
 
Select Fourth-Quarter Contract Signings: 
In the fourth quarter, the company entered into several contracts in each of 
its sectors including the following: 
 
  * U.S. Federal: Unisys was awarded a subcontract with a Federal law 
    enforcement agency to provide end user services and infrastructure services 
    powered by InteliServeT. 
  * Public: A U.S. state government signed a contract with the company for an 
    integrated security framework and related disaster recovery services as 
    well as to continue to provide private hybrid cloud services. The two-year 
    contract is worth approximately $144 million, supporting government 
    initiatives to provide mission-critical systems and data to state agencies 
    and citizens. 
  * Commercial: Unisys signed a contract to expand its relationship with a 
    major Asian airline to provide technology that empowers cargo staff to be 
    more productive using mobile devices to process shipments on the move at 
    any location, such as a warehouse or an aircraft ramp, using digital 
    signatures and bar code scanning via a mobile device to process freight 
    more quickly and securely. 
  * Financial Services: A large financial sector client signed a new agreement 
    with Unisys to expand their use of Unisys' ClearPath Forward® 
    infrastructure to run its mission critical applications. This new contract 
    will also support the institution's training and development. 
 
U.S. Federal Sale 
In conjunction with the sale of Unisys' U.S. Federal business that was recently 
announced, the company expects to hold an investor day on April 29th 
(contingent on transaction closing prior to that date) to provide more insight 
into the expected implications of that transaction. Additional details on this, 
including expected timing, will be posted to the Unisys Investor Relations 
Website. 
 
Conference Call 
Unisys will hold a conference call today at 5:00 p.m. Eastern Time to discuss 
its results, including guidance for 2020 reflecting the impact of the expected 
sale of its U.S. Federal business. The listen-only webcast, as well as the 
accompanying presentation materials, can be accessed on the Unisys Investor 
website at www.unisys.com/investor. Following the call, an audio replay of the 
webcast, and accompanying presentation materials, can be accessed through the 
same link. 
 
(1) Constant currency - The company refers to growth rates in constant currency 
or on a constant currency basis so that the business results can be viewed 
without the impact of fluctuations in foreign currency exchange rates to 
facilitate comparisons of the company's business performance from one period to 
another. Constant currency is calculated by retranslating current and prior 
period results at a consistent rate. 
 
(2) Services Backlog - Services Backlog is the balance of contracted services 
revenue not yet recognized, including only the funded portion of services 
contracts with the U.S. Federal government. 
 
Non-GAAP and Other Information 
Although appropriate under generally accepted accounting principles ("GAAP"), 
the company's results reflect revenue and charges that the company believes are 
not indicative of its ongoing operations and that can make its revenue, 
profitability and liquidity results difficult to compare to prior periods, 
anticipated future periods, or to its competitors' results. These items consist 
of certain portions of revenue, post-retirement, debt exchange and 
cost-reduction and other expenses. Management believes each of these items can 
distort the visibility of trends associated with the company's ongoing 
performance. Management also believes that the evaluation of the company's 
financial performance can be enhanced by use of supplemental presentation of 
its results that exclude the impact of these items in order to enhance 
consistency and comparativeness with prior or future period results. The 
following measures are often provided and utilized by the company's management, 
analysts, and investors to enhance comparability of year-over-year results, as 
well as to compare results to other companies in our industry. 
 
(3)  Non-GAAP adjusted revenue - In 2018 and 2019, the company's non-GAAP 
results reflect adjustments to exclude certain revenue. In 2018, this includes 
revenue from software license extensions and renewals, which were contracted 
for in 2017 and properly recorded as revenue at that time under the revenue 
recognition rules then in effect (ASC 605). Upon adoption of the new revenue 
recognition rules (ASC 606) on January 1, 2018, and since the company adopted 
ASC 606 under the modified retrospective method whereby prior periods were not 
restated, the company was required to include $53 million in the cumulative 
effect adjustment to retained earnings on January 1, 2018. ASC 606 requires 
revenue related to software license renewals or extensions to be recorded when 
the new license term begins, which in the case of the $53 million was January 
1, 2018. The company has excluded revenue and related profit for these software 
licenses in its non-GAAP results since it has been previously reported in 2017. 
This is a one-time adjustment and it will not reoccur in future periods. 
Additionally, the company's non-GAAP results include adjustments to exclude 
certain revenue and related profit relating to reimbursements from the 
company's check-processing JV partners for restructuring expenses included as 
part of the company's restructuring program. 
 
(4) Non-GAAP operating profit - The company recorded pretax post-retirement 
expense and pretax charges in connection with cost-reduction activities, debt 
exchange and other expenses. For the company, non-GAAP operating profit 
excluded these items. The company believes that this profitability measure is 
more indicative of the company's operating results and aligns those results to 
the company's external guidance, which is used by the company's management to 
allocate resources and may be used by analysts and investors to gauge the 
company's ongoing performance. During 2018 and 2019, the company included the 
non-GAAP adjustments discussed in (3) herein. 
 
(5)  Non-GAAP adjusted Services gross profit - During 2018 and 2019, the 
company included the adjustments discussed in (3) herein. 
 
(6)  Non-GAAP adjusted Services operating profit - During 2018 and 2019, the 
company included the adjustments discussed in (3) herein. 
 
(7)  Non-GAAP adjusted Technology gross profit - In the first quarter of 2018, 
the company included the ASC 606 adjustment discussed in (3) herein. 
 
(8) Non-GAAP adjusted Technology operating profit - In the first quarter of 
2018, the company included the ASC 606 adjustment discussed in (3) herein. 
 
(9) EBITDA & adjusted EBITDA - Earnings before interest, taxes, depreciation 
and amortization ("EBITDA") is calculated by starting with net income (loss) 
attributable to Unisys Corporation common shareholders and adding or 
subtracting the following items: net income attributable to noncontrolling 
interests, interest expense (net of interest income), provision for income 
taxes, depreciation and amortization. Adjusted EBITDA further excludes 
post-retirement, debt exchange, and cost-reduction and other expenses, non-cash 
share-based expense, and other (income) expense adjustment. In order to provide 
investors with additional understanding of the company's operating results, 
these charges are excluded from the adjusted EBITDA calculation. During 2018 
and 2019, the company included the adjustments discussed in (3) herein. 
 
(10) Non-GAAP diluted earnings per share - The company has recorded 
post-retirement expense and charges in connection with debt exchange and 
cost-reduction activities and other expenses. Management believes that 
investors may have a better understanding of the company's performance and 
return to shareholders by excluding these charges from the GAAP diluted 
earnings/loss per share calculations. The tax amounts presented for these items 
for the calculation of non-GAAP diluted earnings per share include the current 
and deferred tax expense and benefits recognized under GAAP for these 
amounts. During 2018 and 2019, the company included the adjustments discussed 
in (3) herein. 
 
(11) Free cash flow - The company defines free cash flow as cash flow from 
operations less capital expenditures. Management believes this liquidity 
measure gives investors an additional perspective on cash flow from on-going 
operating activities in excess of amounts used for reinvestment. 
 
(12) Adjusted free cash flow - Because inclusion of the company's 
post-retirement contributions and cost-reduction charges/reimbursements and 
other payments in free cash flow may distort the visibility of the company's 
ability to generate cash flow from its operations without the impact of these 
non-operational costs, management believes that investors may be interested in 
adjusted free cash flow, which provides free cash flow before these payments. 
This liquidity measure was provided to analysts and investors in the form of 
external guidance and is used by management to measure operating liquidity. 
 
About Unisys 
Unisys is a global information technology company that builds high-performance, 
security-centric solutions for the most demanding businesses and governments. 
Unisys offerings include security software and services; digital transformation 
and workplace services; industry applications and services; and innovative 
software operating environments for high-intensity enterprise computing. For 
more information on how Unisys builds better outcomes securely for its clients 
across the Government, Financial Services and Commercial markets, visit 
www.unisys.com. 
 
Forward-Looking Statements 
Any statements contained in this release that are not historical facts are 
forward-looking statements as defined in the Private Securities Litigation 
Reform Act of 1995. Forward-looking statements include, but are not limited to, 
any projections of earnings, revenues, annual contract value, total contract 
value, new business ACV or TCV, backlog or other financial items; any 
statements of the company's plans, strategies or objectives for future 
operations; statements regarding future economic conditions or performance; and 
any statements of belief or expectation. All forward-looking statements rely on 
assumptions and are subject to various risks and uncertainties that could cause 
actual results to differ materially from expectations. In particular, 
statements concerning annual and total contract value are based, in part, on 
the assumption that all options of the contracts (Federal only) included in the 
calculation of such value will be exercised and that each of those contracts 
will continue for their full contracted term. Risks and uncertainties that 
could affect the company's future results include, but are not limited to, the 
following: our ability to improve revenue and margins in our services business; 
our significant pension obligations and required cash contributions and 
requirements to make additional significant cash contributions to our defined 
benefit pension plans; our ability to access financing markets; our ability to 
maintain our installed base and sell new solutions; the potential adverse 
effects of aggressive competition in the information services and technology 
marketplace; cybersecurity breaches could result in significant costs and could 
harm our business and reputation; the potential adverse effects of a U.S. 
Federal government shutdown; our ability to effectively anticipate and respond 
to volatility and rapid technological innovation in our industry; our ability 
to retain significant clients; our contracts may not be as profitable as 
expected or provide the expected level of revenues; the risks of doing business 
internationally when a significant portion of our revenue is derived from 
international operations; the business and financial risk in implementing 
future acquisitions or dispositions; the impact of Brexit could adversely 
affect the company's operations in the United Kingdom as well as the funded 
status of the company's U.K. pension plans; our ability to attract, motivate 
and retain experienced and knowledgeable personnel in key positions; contracts 
with U.S. governmental agencies may subject us to audits, criminal penalties, 
sanctions and other expenses and fines; a significant disruption in our IT 
systems could adversely affect our business and reputation; we may face damage 
to our reputation or legal liability if our clients are not satisfied with our 
services or products; the performance and capabilities of third parties with 
whom we have commercial relationships; an involuntary termination of the 
company's U.S. qualified defined benefit pension plans; the potential for 
intellectual property infringement claims to be asserted against us or our 
clients; the possibility that legal proceedings could affect our results of 
operations or cash flow or may adversely affect our business or reputation; the 
adverse effects of global economic conditions, acts of war, terrorism or 
natural disasters and the company's consideration of all available information 
following the end of the quarter and before the filing of the Form 10-K and the 
possible impact of this subsequent event information on its financial 
statements for the reporting period. Additional discussion of factors that 
could affect the company's future results is contained in its periodic filings 
with the Securities and Exchange Commission. The company assumes no obligation 
to update any forward-looking statements. 
 
RELEASE NO.: 0225/9753 
 
Unisys and other Unisys products and services mentioned herein, as well as 
their respective logos, are trademarks or registered trademarks of Unisys 
Corporation. Any other brand or product referenced herein is acknowledged to be 
a trademark or registered trademark of its respective holder. 
 
UIS-Q 
 
                              UNISYS CORPORATION 
 
                      CONSOLIDATED STATEMENTS OF INCOME 
 
                                 (Unaudited) 
 
                      (Millions, except per share data) 
 
                                        Three Months Ended      Year Ended 
                                           December 31,          December 
                                                                   31, 
 
                                            2019      2018      2019      2018 
 
Revenue 
 
Services                                   $         $             $         $ 
                                           633.1     625.5   2,552.7   2,386.3 
 
Technology                                 108.4     135.4     396.0     438.7 
 
                                           741.5     760.9   2,948.7   2,825.0 
 
Costs and expenses 
 
Cost of revenue: 
 
Services                                   551.3     550.5   2,134.1   2,010.5 
 
Technology                                  40.0      32.0     148.2     128.2 
 
                                           591.3     582.5   2,282.3   2,138.7 
 
Selling, general and administrative        103.6      95.8     396.9     370.3 
 
Research and development                     9.2      10.1      31.3      31.9 
 
                                           704.1     688.4   2,710.5   2,540.9 
 
Operating profit                            37.4      72.5     238.2     284.1 
 
Interest expense                            15.2      15.8      62.1      64.0 
 
Other income (expense), net               (27.9)    (18.6)   (136.4)    (76.9) 
 
Income (loss) before income taxes          (5.7)      38.1      39.7     143.2 
 
Provision for income taxes                  11.2      13.9      53.0      64.3 
 
Consolidated net income (loss)            (16.9)      24.2    (13.3)      78.9 
 
Net income (loss) attributable to          (6.1)     (0.8)       3.9       3.4 
noncontrolling interests 
 
Net income (loss) attributable to        $         $         $         $ 
Unisys Corporation                        (10.8)      25.0    (17.2)      75.5 
 
Earnings (loss) per share attributable 
to Unisys Corporation 
 
Basic                                    $         $         $         $ 
                                          (0.17)      0.49    (0.31)      1.48 
 
Diluted                                  $         $         $         $ 
                                          (0.17)      0.41    (0.31)      1.30 
 
Shares used in the per share 
computations (in thousands): 
 
Basic                                     62,397    51,028    55,961    50,946 
 
Diluted                                   62,397    73,626    55,961    73,355 
 
 
 
                               UNISYS CORPORATION 
 
                                SEGMENT RESULTS 
 
                                  (Unaudited) 
 
                                   (Millions) 
 
                               Total     Eliminations    Services    Technology 
 
Three Months Ended December 
31, 2019 
 
Customer revenue                $        $                  $            $ 
                                  741.5              -        633.1        108.4 
 
Intersegment                          -          (8.4)            -          8.4 
 
Total revenue                   $          $                $            $ 
                                  741.5          (8.4)        633.1        116.8 
 
Gross profit percent             20.3 %                      15.5 %       64.0 % 
 
Operating profit percent          5.0 %                       2.8 %       45.2 % 
 
Three Months Ended December 
31, 2018 
 
Customer revenue                $        $                  $            $ 
                                  760.9              -        625.5        135.4 
 
Intersegment                          -          (6.4)            -          6.4 
 
Total revenue                   $          $                $            $ 
                                  760.9          (6.4)        625.5        141.8 
 
Gross profit percent             23.4 %                      15.0 %       75.5 % 
 
Operating profit percent          9.5 %                       2.1 %       58.6 % 
 
                               Total     Eliminations    Services    Technology 
 
Year Ended December 31, 
2019 
 
Customer revenue                  $      $                    $          $ 
                                2,948.7              -      2,552.7        396.0 
 
Intersegment                          -         (15.2)            -         15.2 
 
Total revenue                     $          $                $          $ 
                                2,948.7         (15.2)      2,552.7        411.2 
 
Gross profit percent             22.6 %                      16.6 %       61.8 % 
 
Operating profit percent          8.1 %                       4.2 %       41.9 % 
 
Year Ended December 31, 
2018 
 
Customer revenue                  $      $                    $          $ 
                                2,825.0              -      2,386.3        438.7 
 
Intersegment                          -         (24.7)            -         24.7 
 
Total revenue                     $          $                $          $ 
                                2,825.0         (24.7)      2,386.3        463.4 
 
Gross profit percent             24.3 %                      16.0 %       69.4 % 
 
Operating profit percent         10.1 %                       2.8 %       51.3 % 
 
 
 
                              UNISYS CORPORATION 
 
                          CONSOLIDATED BALANCE SHEETS 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                                 December 31,      December 31, 
                                                         2019              2018 
 
Assets 
 
Current assets 
 
Cash and cash equivalents                    $          538.8  $          605.0 
 
Accounts receivable, net                                495.0             509.2 
 
Contract assets                                          53.0              29.7 
 
Inventories: 
 
Parts and finished equipment                             10.9              14.0 
 
Work in process and materials                             9.8              13.3 
 
Prepaid expenses and other current assets               113.8             130.2 
 
Total                                                 1,221.3           1,301.4 
 
Properties                                              806.0             800.2 
 
Less - Accumulated depreciation and                     681.6             678.9 
amortization 
 
Properties, net                                         124.4             121.3 
 
Outsourcing assets, net                                 202.5             216.4 
 
Marketable software, net                                186.8             162.1 
 
Operating lease right-of-use assets                     127.1                 - 
 
Prepaid postretirement assets                           136.2             147.6 
 
Deferred income taxes                                   114.0             109.3 
 
Goodwill                                                177.2             177.8 
 
Restricted cash                                          13.0              19.1 
 
Other long-term assets                                  201.5             202.6 
 
Total                                         $       2,504.0   $       2,457.6 
 
Liabilities and deficit 
 
Current liabilities 
 
Current maturities of long-term debt              $                 $ 
                                                         13.5              10.0 
 
Accounts payable                                        252.0             268.9 
 
Deferred revenue                                        288.6             294.4 
 
Other accrued liabilities                               373.2             350.0 
 
Total                                                   927.3             923.3 
 
Long-term debt                                          566.1             642.8 
 
Long-term postretirement liabilities                  1,960.2           1,956.5 
 
Long-term deferred revenue                              147.4             157.2 
 
Long-term operating lease liabilities                    83.6                 - 
 
Other long-term liabilities                              47.7              77.4 
 
Commitments and contingencies 
 
Total deficit                                       (1,228.3)         (1,299.6) 
 
Total                                         $       2,504.0    $      2,457.6 
 
 
 
                              UNISYS CORPORATION 
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                                                Year Ended 
                                                               December 31, 
 
                                                                2019       2018 
 
Cash flows from operating activities 
 
Consolidated net income (loss)                                 $          $ 
                                                              (13.3)       78.9 
 
Adjustments to reconcile consolidated net income (loss) 
to net cash provided by operating 
activities: 
 
Foreign currency transaction losses                             11.0        7.4 
 
Non-cash interest expense                                        9.2       10.5 
 
Loss on debt exchange                                           20.1          - 
 
Employee stock compensation                                     13.2       13.2 
 
Depreciation and amortization of properties                     35.3       40.4 
 
Depreciation and amortization of outsourcing assets             63.8       66.8 
 
Amortization of marketable software                             48.3       56.9 
 
Other non-cash operating activities                            (1.6)      (4.8) 
 
Loss on disposal of capital assets                               1.5        0.8 
 
Gain on sale of properties                                         -      (7.3) 
 
Postretirement contributions                                 (109.4)    (138.7) 
 
Postretirement expense                                          96.6       84.1 
 
Decrease in deferred income taxes, net                           4.4        8.2 
 
Changes in operating assets and liabilities: 
 
Receivables, net                                               (8.3)     (50.5) 
 
Inventories                                                      6.1      (5.5) 
 
Accounts payable and other accrued liabilities               (114.4)     (62.2) 
 
Other liabilities                                               51.5      (0.4) 
 
Other assets                                                     9.9     (23.9) 
 
Net cash provided by operating activities                      123.9       73.9 
 
Cash flows from investing activities 
 
Proceeds from investments                                    3,568.9    3,708.0 
 
Purchases of investments                                   (3,566.1)  (3,722.0) 
 
Investment in marketable software                             (73.0)     (80.7) 
 
Capital additions of properties                               (38.0)     (35.6) 
 
Capital additions of outsourcing assets                       (48.8)     (73.0) 
 
Net proceeds from sale of properties                           (0.3)       19.2 
 
Other                                                          (0.9)      (0.9) 
 
Net cash used for investing activities                       (158.2)    (185.0) 
 
Cash flows from financing activities 
 
Cash paid in connection with debt exchange                    (56.7)          - 
 
Proceeds from capped call transactions                           7.2          - 
 
Proceeds from issuance of long-term debt                        30.5          - 
 
Payments of long-term debt                                    (14.4)      (2.3) 
 
Financing fees                                                     -      (0.2) 
 
Other                                                          (4.6)      (2.3) 
 
Net cash used for financing activities                        (38.0)      (4.8) 
 
Effect of exchange rate changes on cash, cash equivalents          -     (24.1) 
and restricted cash 
 
Decrease in cash, cash equivalents and restricted cash        (72.3)    (140.0) 
 
Cash, cash equivalents and restricted cash, beginning of       624.1      764.1 
period 
 
Cash, cash equivalents and restricted cash, end of               $          $ 
period                                                         551.8      624.1 
 
 
 
                              UNISYS CORPORATION 
 
        RECONCILIATIONS OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES 
 
                                  (Unaudited) 
 
                       (Millions, except per share data) 
 
                                         Three Months Ended      Year Ended 
 
                                            December 31,        December 31, 
 
                                             2019      2018      2019      2018 
 
GAAP net income (loss) attributable to    $         $         $         $ 
Unisys                                     (10.8)      25.0    (17.2)      75.5 
Corporation common shareholders 
 
Topic 606 adjustment:  pretax                   -         -         -    (53.0) 
 
                       tax                      -         -         -       5.3 
 
                       net of tax               -         -         -    (47.7) 
 
Postretirement         pretax                25.1      25.9      96.6      84.1 
expense: 
 
                       tax                  (0.2)     (1.1)         -     (0.3) 
 
                       net of tax            24.9      24.8      96.6      83.8 
 
Debt exchange, cost    pretax                25.9      16.5      54.9      10.3 
reduction and 
other expenses: 
 
                       tax                      -     (1.8)     (1.8)     (1.6) 
 
                       net of tax            25.9      14.7      53.1       8.7 
 
                       minority               0.6       2.0       7.2       3.5 
                       interest 
 
                       net of minority       26.5      16.7      60.3      12.2 
                       interest 
 
Non-GAAP net income attributable to          40.6      66.5     139.7     123.8 
Unisys Corporation 
common shareholders 
 
Add interest expense on convertible           2.1       5.0      15.3      19.6 
notes 
 
Non-GAAP net income attributable to       $         $           $         $ 
Unisys Corporation                           42.7      71.5     155.0     143.4 
for diluted earnings per share 
 
Weighted average shares (thousands)        62,397    51,028    55,961    50,946 
 
Plus incremental shares from assumed 
conversion: 
 
                       Employee stock         456       730       411       541 
                       plans 
 
                       Convertible          8,626    21,868    16,577    21,868 
                       notes 
 
Non-GAAP adjusted weighted average         71,479    73,626    72,949    73,355 
shares 
 
Diluted earnings (loss) per share 
 
GAAP basis 
 
GAAP net income (loss) attributable to    $         $         $         $ 
Unisys Corporation for                     (10.8)      30.0    (17.2)      95.1 
diluted earnings per share 
 
Divided by adjusted weighted average       62,397    73,626    55,961    73,355 
shares 
 
GAAP diluted earnings (loss) per share    $         $         $         $ 
                                           (0.17)      0.41    (0.31)      1.30 
 
Non-GAAP basis 
 
Non-GAAP net income attributable to       $         $           $         $ 
Unisys Corporation for                       42.7      71.5     155.0     143.4 
diluted earnings per share 
 
Divided by Non-GAAP adjusted weighted      71,479    73,626    72,949    73,355 
average shares 
 
Non-GAAP diluted earnings per share       $         $         $         $ 
                                             0.60      0.97      2.12      1.95 
 
 
 
                              UNISYS CORPORATION 
 
                     RECONCILIATIONS OF GAAP TO NON-GAAP 
 
                                 (Unaudited) 
 
                                  (Millions) 
 
                                FREE CASH FLOW 
 
                                 Three Months Ended          Year Ended 
 
                                    December 31,            December 31, 
 
                                     2019        2018        2019         2018 
 
Cash provided by operations         $           $           $          $ 
                                    125.7       151.3       123.9         73.9 
 
Additions to marketable            (16.8)      (19.0)      (73.0)       (80.7) 
software 
 
Additions to properties             (8.9)      (10.6)      (38.0)       (35.6) 
 
Additions to outsourcing            (4.4)      (18.6)      (48.8)       (73.0) 
assets 
 
Free cash flow                       95.6       103.1      (35.9)      (115.4) 
 
Postretirement funding               27.1        14.2       109.4        138.7 
 
Cost reduction and other             16.4         6.5        53.5         38.7 
payments, net of 
reimbursements 
 
Adjusted free cash flow             $           $           $          $ 
                                    139.1       123.8       127.0         62.0 
 
 
 
                              UNISYS CORPORATION 
 
                     RECONCILIATIONS OF GAAP TO NON-GAAP 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                    EBITDA 
 
                                   Three Months Ended         Year Ended 
 
                                      December 31,           December 31, 
 
                                       2019        2018        2019       2018 
 
Net income (loss) attributable      $           $           $          $ 
to Unisys Corporation                (10.8)        25.0      (17.2)       75.5 
common shareholders 
 
Net income (loss) attributable        (6.1)       (0.8)         3.9        3.4 
to noncontrolling interests 
 
Interest expense, net of               13.1        13.1        51.5       52.3 
interest income of $2.1, $2.7, 
$10.6, 
$11.7 respectively* 
 
Provision for income taxes          $           $           $          $ 
                                       11.2        13.9        53.0       64.3 
 
Depreciation                           25.1        27.3        99.1      107.2 
 
Amortization                           13.3        14.1        48.3       56.9 
 
EBITDA                              $           $             $          $ 
                                       45.8        92.6       238.6      359.6 
 
Topic 606 adjustment              $           $           $            $ 
                                          -           -           -     (53.0) 
 
Postretirement expense                 25.1        25.9        96.6       84.1 
 
Debt exchange, cost reduction          25.9        16.5        53.8       10.3 
and other expenses** 
 
Non-cash share based expense            3.1         3.2        13.2       13.2 
 
Other (income) expense                  5.2       (3.7)        20.0        8.3 
adjustment*** 
 
Adjusted EBITDA                       $           $           $          $ 
                                      105.1       134.5       422.2      422.5 
 
 
 
 
*Included in other (income) expense, net on the consolidated statements of 
income 
 
**Reduced for depreciation and amortization included above 
 
***Other (income) expense, net as reported on the consolidated statements of 
income less postretirement 
expense, interest income and items included in cost reduction and other 
expense 
 
                                      Three Months Ended       Year Ended 
 
                                         December 31,         December 31, 
 
                                          2019       2018      2019      2018 
 
Revenue                                  $          $             $         $ 
                                         741.5      760.9   2,948.7   2,825.0 
 
Non-GAAP revenue                         739.3      754.6   2,931.2   2,762.6 
 
Net income as a percentage of           (1.5)%      3.3 %    (0.6)%     2.7 % 
revenue 
 
Non-GAAP net income as a percentage      5.5 %      8.8 %     4.8 %     4.5 % 
of Non-GAAP revenue 
 
Adjusted EBITDA as a percentage of      14.2 %     17.8 %    14.4 %    15.3 % 
Non-GAAP revenue 
 
 
 
                              UNISYS CORPORATION 
 
    RECONCILIATIONS OF GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                              Three Months Ended             Year Ended 
 
Services Segment                 December 31,               December 31, 
 
                                  2019          2018         2019          2018 
 
GAAP total revenue        $      633.1  $      625.5  $   2,552.7   $   2,386.3 
 
Restructuring                    (2.2)         (6.3)       (17.5)         (9.4) 
reimbursement 
 
Non-GAAP revenue           $     630.9   $     619.2   $  2,535.2    $  2,376.9 
 
GAAP gross margin              $             $              $      $      380.8 
                                  98.0          93.9        423.9 
 
Restructuring                    (2.2)         (6.3)       (17.5)         (9.4) 
reimbursement 
 
Non-GAAP gross margin     $       95.8  $       87.6  $     406.4   $     371.4 
 
GAAP operating profit          $             $              $           $ 
                                  17.7          13.3        108.2          67.6 
 
Restructuring                    (2.2)         (6.3)       (17.5)         (9.4) 
reimbursement 
 
Non-GAAP operating        $       15.5     $              $        $       58.2 
profit                                           7.0         90.7 
 
GAAP gross margin %              15.5%         15.0%        16.6%         16.0% 
 
Non-GAAP gross margin %          15.2%         14.1%        16.0%         15.6% 
 
GAAP operating profit %           2.8%          2.1%         4.2%          2.8% 
 
Non-GAAP operating                2.5%          1.1%         3.6%          2.4% 
profit % 
 
                              Three Months Ended             Year Ended 
 
Technology Segment               December 31,               December 31, 
 
                                  2019          2018         2019          2018 
 
GAAP total revenue        $      116.8  $      141.8        $      $      463.4 
                                                            411.2 
 
Topic 606 adjustment                 -             -            -        (53.0) 
 
Non-GAAP revenue           $     116.8  $      141.8  $     411.2   $     410.4 
 
GAAP gross margin              $        $      107.1        $      $      321.5 
                                  74.8                      254.2 
 
Topic 606 adjustment                 -             -            -        (53.0) 
 
Non-GAAP gross margin     $       74.8   $     107.1  $     254.2   $     268.5 
 
GAAP operating profit          $             $              $      $      237.8 
                                  52.8          83.1        172.2 
 
Topic 606 adjustment                 -             -            -        (53.0) 
 
Non-GAAP operating        $       52.8  $       83.1  $     172.2   $     184.8 
profit 
 
GAAP gross margin %              64.0%         75.5%        61.8%         69.4% 
 
Non-GAAP gross margin %          64.0%         75.5%        61.8%         65.4% 
 
GAAP operating profit %          45.2%         58.6%        41.9%         51.3% 
 
Non-GAAP operating               45.2%         58.6%        41.9%         45.0% 
profit % 
 
 
 
 
                              UNISYS CORPORATION 
 
   RECONCILIATIONS OF GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING 
 
                                 (Unaudited) 
 
                                  (Millions) 
 
                                 Three Months Ended          Year Ended 
 
Total Unisys                        December 31,             December 31, 
 
                                     2019         2018        2019        2018 
 
GAAP total revenue                  $            $             $           $ 
                                    741.5        760.9     2,948.7     2,825.0 
 
Topic 606 adjustment                    -            -           -      (53.0) 
 
Restructuring reimbursement         (2.2)        (6.3)      (17.5)       (9.4) 
 
Non-GAAP revenue                    $      $     754.6  $  2,931.2  $  2,762.6 
                                    739.3 
 
GAAP gross margin                   $            $           $           $ 
                                    150.2        178.4       666.4       686.3 
 
Topic 606 adjustment                    -            -           -      (53.0) 
 
Restructuring reimbursement         (2.2)        (6.3)      (17.5)       (9.4) 
 
Postretirement expense                  -            -           -           - 
 
Cost-reduction expense               17.7         22.3        11.0        18.1 
 
Non-GAAP gross margin               $      $     194.4       $           $ 
                                    165.7                    659.9       642.0 
 
GAAP operating profit             $            $             $           $ 
                                     37.4         72.5       238.2       284.1 
 
Topic 606 adjustment                    -            -           -      (53.0) 
 
Restructuring reimbursement         (2.2)        (6.3)      (17.5)       (9.4) 
 
Postretirement expense                0.8          0.9         3.3         3.8 
 
Cost-reduction and other             27.6         22.8        38.7        19.7 
expenses 
 
Non-GAAP operating profit         $            $             $           $ 
                                     63.6         89.9       262.7       245.2 
 
GAAP gross margin %                 20.3%        23.4%       22.6%       24.3% 
 
Non-GAAP gross margin %             22.4%        25.8%       22.5%       23.2% 
 
GAAP operating profit %              5.0%         9.5%        8.1%       10.1% 
 
Non-GAAP operating profit %          8.6%        11.9%        9.0%        8.9% 
 
SOURCE Unisys Corporation 
 
CONTACT: Investors: Courtney Holben, Unisys, 215-986-3379, 
courtney.holben@unisys.com; Media: John Clendening, Unisys, 214-403-1981, 
john.clendening@unisys.com 
 
 
 
END 
 

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February 26, 2020 02:00 ET (07:00 GMT)

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