Unisys Corp Unisys Closes Sale of U.S. Federal Business to SAIC

 
TIDMUSY 
 
Unisys Closes Sale of U.S. Federal Business to SAIC 
 
$1.2 billion transaction significantly strengthens company's balance sheet and 
cash flow profile, increases operational flexibility; company expects to use 
net proceeds largely to pay down debt and reduce pension obligations 
 
Company promotes Eric Hutto to president and chief operating officer 
 
BLUE BELL, Pa., March 16, 2020 /PRNewswire/ -- Unisys Corporation (NYSE: UIS) 
today announced the close of the sale of the company's U.S. Federal business to 
Science Applications International Corp. (NYSE: SAIC). 
 
Net proceeds from the transaction, which the company announced on February 6, 
are largely expected to be used to pay down debt and reduce pension 
obligations, thereby significantly improving Unisys' balance sheet and cash 
flow profile, U.S. pension funded status and overall financial flexibility. 
Related to this, the company also announced that it has issued a notice of 
redemption to redeem all $440 million in aggregate principal amount of its 
outstanding 10.750% Senior Secured Notes due 2022. Pro forma for the 
transaction, the company's net leverage (inclusive of pension deficit) has been 
reduced from 4.3x 2019 Adj. EBITDA(1) pre-transaction to 2.4x on a pro forma 
basis. 
 
"The transaction ushers in a more agile Unisys," said Unisys Chairman and CEO 
Peter Altabef. "The improved capital structure that comes from the sale of U.S. 
Federal positions Unisys with improved operational flexibility to better serve 
our clients and provides the potential for delivering increased value to 
shareholders." 
 
Company Promotes Eric Hutto 
In conjunction with the announcement of the transaction's close, Unisys also 
today announced the appointment of Eric Hutto, senior vice president and 
president of the Enterprise Solutions business, as the company's president and 
chief operating officer. Enterprise Solutions and U.S. Federal were the 
company's two business units prior to the sale of U.S. Federal. 
 
"Eric's business acumen, hard work and visionary leadership have all been on 
display since he joined the company in 2015," Altabef said. "Eric brings 
passion and a competitive will to win that is contagious among our associates, 
and he will help drive Unisys to continued success. I look forward to working 
closely with him in taking our company forward." 
 
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. 
 
(1)  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 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, post-retirement, debt exchange, and 
cost-reduction and other expenses, non-cash share-based expense, and other 
(income) expense adjustments. In order to provide investors with additional 
understanding of the company's operating results, these charges are excluded 
from the adjusted EBITDA calculation. Pro forma adjusted EBITDA excludes 
Adjusted EBITDA for U.S. Federal business for the full year 2019. 
 
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, commercial and financial services markets, visit 
www.unisys.com. 
 
Follow Unisys on Twitter and  LinkedIn. 
 
Forward-Looking Statements 
Any statements contained in this release are not historical facts, including 
those regarding future performance, are forward-looking statements under the 
Private Securities Litigation Reform Act of 1995. These forward-looking 
statements are based on current expectations, assumptions, anticipated events 
or trend, beliefs relating to matters that are not historical in nature and 
involve risks and uncertainties that could cause actual results to differ from 
expectations, all of which are difficult to predict and many of which are 
beyond the control of the company. Actual results may differ materially from 
the company's current expectations depending upon a number of factors affecting 
the company's business and risks associated with the transaction. These factors 
include, among others: the ability of the company to achieve the intended 
benefits of the transaction (including, without limitation, risks related to 
the ability of the company to repay certain indebtedness and reduce pension 
obligations following the closing of the transaction); the risk related to the 
change of the company's business structure and a decrease in the size of the 
company following the closing of the transaction;  the risk related to the 
company's ability to operate its business as a going-concern following the 
closing of the transaction; the company's ability to continue revenue growth 
and margin expansion in its services business; the company's significant 
pension obligations and required cash contributions and requirements to make 
additional significant cash contributions to its defined benefit pension plans; 
the company's ability to access financing markets; a reduction in the company's 
credit rating; the company's ability to maintain its 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 the company's business and 
reputation; the company's ability to effectively anticipate and respond to 
volatility and rapid technological innovation in its industry; the company's 
ability to retain significant clients; the company's contracts may not be as 
profitable as expected or provide the expected level of revenues; the risks of 
doing business internationally when a significant portion of the company's 
revenue is derived from international operations; the business and financial 
risk in implementing future acquisitions or dispositions; the adverse effects 
of global economic conditions, acts of war, terrorism or natural disasters or 
the widespread outbreak of infectious diseases; 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; the company's ability to 
attract, motivate and retain experienced and knowledgeable personnel in key 
positions; a significant disruption in the company's IT systems could adversely 
affect its business and reputation; the company may face damage to its 
reputation or legal liability if its clients are not satisfied with the 
company's services or products; the performance and capabilities of third 
parties with whom the company has 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 
the company or its clients; and the possibility that legal proceedings could 
affect the company's results of operations or cash flow or may adversely affect 
the company's business or reputation;. These risks and uncertainties are 
discussed in the company's reports filed with the SEC, including but not 
limited to the company's annual report on Form 10-K and in its subsequent 
reports on Form 10-Q and periodic reports on Form 8-K, and from time to time in 
the company's other investor communications. Except as expressly required by 
law, the company assumes no obligation to update any forward-looking statement 
to reflect events or circumstances that occur after the date on which the 
statement is made. 
 
RELEASE NO.: 0316/9758 
 
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-C 
 
CONTACT: Investors: Courtney Holben, Unisys, 215-986-3379, 
[e-mail] or Media: Tony Buglione, Unisys, 1-215-274-1942, 
[e-mail] 
 
 
 
END 
 

(END) Dow Jones Newswires

March 16, 2020 07:30 ET (11:30 GMT)