Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subjects: ERN, ERP

Unisys Announces 2Q22 Results


Company Beats Consensus on All Key Metrics; Revenue Flat Year Over Year and Up in Constant Currency; Annual Contract Value, Total Contract Value and Pipeline Grow Year Over Year

BLUE BELL, Pa., Aug. 3, 2022 /PRNewswire/ -- Unisys Corporation (NYSE: UIS) today reported second-quarter 2022 financial results. "We exceeded consensus estimates on all key metrics for the second quarter, grew revenue on a constant-currency basis, and we grew our ACV and TCV signings and pipeline," said Unisys Chair and CEO Peter A. Altabef. "Most significantly, we have momentum in our key focus areas within Digital Workplace Solutions and Cloud, Applications & Infrastructure Solutions."

Summary of Second-Quarter 2022 Results

Please refer to the accompanying financial tables for a reconciliation of the GAAP to non-GAAP measures presented.

2Q22 Financial Highlights by Segment:
Digital Workplace Solutions ("DWS"), which provides modern and traditional workplace solutions:

Cloud, Applications & Infrastructure Solutions ("CA&I"), which provides digital platform, applications, and infrastructure solutions:

Enterprise Computing Solutions ("ECS"), which provides solutions that harness secure, continuous high-intensity computing and enable digital services through software-defined operating environments:

2022 Financial Guidance

Conference Call
Unisys will hold a conference call August 4th at 8:00 a.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) Consensus ? Refers to FactSet consensus estimates.

(2) Constant currency ? The company refers to growth rates in constant currency or on a constant currency basis so that the business results can be viewed without the impact of fluctuations in foreign currency exchange rates to facilitate comparisons of the company's business performance from one period to another. Constant currency is calculated by retranslating current and prior period results at a consistent rate.

(3) Backlog ? Represents future revenue associated with contracted work which has not yet been delivered or performed. Although we believe this backlog is firm, we may, for commercial reasons, allow the orders to be cancelled, with or without penalty.

(4) Pipeline ? Pipeline represents prospective sale opportunities being pursued or for which bids have been submitted. There is no assurance that pipeline will translate into recorded revenue.

(5) Annual Contract Value (ACV) ? The revenue expected to be recognized during the first twelve months following the signing of a contract.

(6) Total Contract Value (TCV) ? The estimated total contractual revenue related to contracts signed in the period without regard for cancellation terms. New business TCV represents TCV attributable to new scope for existing clients and new logo contracts.

Non-GAAP and Other Information
Although appropriate under generally accepted accounting principles ("GAAP"), the company's results reflect charges that the company believes are not indicative of its ongoing operations and that can make its profitability and liquidity results difficult to compare to prior periods, anticipated future periods, or to its competitors' results. These items consist of certain portions of post-retirement 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.

(7) Non-GAAP operating profit ? The company recorded pretax post-retirement expense and pretax charges in connection with cost-reduction activities and other expenses. For the company, non-GAAP operating profit excluded these items. The company believes that this profitability measure is more indicative of the company's operating results and aligns those results to the company's external guidance, which is used by the company's management to allocate resources and may be used by analysts and investors to gauge the company's ongoing performance.

(8) 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 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.

(9) Non-GAAP net income and non-GAAP diluted earnings per share ? The company has recorded post-retirement expense and charges in connection with 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.

(10) 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.

(11) Adjusted free cash flow ? Because inclusion of the company's post-retirement contributions, 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.

Non-GAAP operating profit, EBITDA and adjusted EBITDA, non-GAAP net income and non-GAAP diluted earnings per share, free cash flow and adjusted free cash flow should not be relied upon as substitutes for, or considered in isolation from, measures calculated in accordance with U.S. GAAP.

About Unisys
Unisys is a technology solutions company that delivers successful outcomes for the most demanding organizations around the world. Unisys offerings include digital workplace solutions, cloud, applications and infrastructure solutions, enterprise computing solutions and business process solutions. For more information on how Unisys delivers for its clients across the commercial, financial services and government sectors, visit 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 or expectations of earnings, revenues, non-GAAP operating profit margin, adjusted EBITDA margin, annual contract value, total contract value, new business ACV or TCV, backlog, pipeline 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 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 attract and retain experienced personnel in key positions; our ability to grow revenue and expand margin in our Digital Workplace Solutions and Cloud, Infrastructure and Applications Solutions businesses; our ability to maintain our installed base and sell new solutions and related services; the business and financial risk in implementing acquisitions or dispositions; the potential adverse effects of aggressive competition in the information services and technology market; our ability to effectively anticipate and respond to rapid technological innovation in our industry; our ability to retain significant clients and attract new clients; our contracts may not be as profitable as expected or provide the expected level of revenues; our ability to develop or acquire the capabilities to enhance the company's solutions; we have significant underfunded pension obligations; the impact of COVID-19 on our business, growth, reputation, projections, financial condition, operations, cash flows and liquidity; the performance and capabilities of third parties with whom we have commercial relationships; cybersecurity breaches could result in incurring significant costs and could harm our business and reputation; a failure to meet standards or expectations with respect to the company's environmental, social and governance practices; the risks of doing business internationally when a significant portion of our revenue is derived from international operations; our ability to access financing markets; a reduction in our credit rating; the adverse effects of global economic conditions, acts of war, terrorism, natural disasters or the widespread outbreak of infectious diseases; 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 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; and our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. 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.  While included under the definition of forward-looking statements, for the avoidance of doubt, any specific guidance or color that the company may provide from time to time regarding its expected future financial performance is effective only on the date given. The company generally will not update, reaffirm or otherwise comment on any such information except as it deems necessary, and then only in a manner that complies with Regulation FD.

RELEASE NO.:  0803/9880

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

 

 

UNISYS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)

(Millions, except per share data)




Three Months Ended

June 30,


Six Months Ended

June 30,



2022


2021


2022


2021

Revenue









Services


$     400.3


$     430.5


$     792.4


$     850.9

Technology


114.7


86.8


169.3


176.2



515.0


517.3


961.7


1,027.1

Costs and expenses









Cost of revenue









Services


322.1


337.9


643.4


676.6

Technology


44.8


37.2


82.8


69.1



366.9


375.1


726.2


745.7

Selling, general and administrative


109.6


94.6


214.0


184.6

Research and development


4.8


6.8


11.3


12.4



481.3


476.5


951.5


942.7

Operating income


33.7


40.8


10.2


84.4

Interest expense


8.3


8.4


16.7


18.5

Other (expense), net


(21.9)


(227.8)


(42.9)


(410.4)

Earnings (loss) before income taxes


3.5


(195.4)


(49.4)


(344.5)

Provision for (benefit from) income taxes


20.3


(53.1)


24.4


(44.7)

Consolidated net loss


(16.8)


(142.3)


(73.8)


(299.8)

Net income (loss) attributable to noncontrolling interests


0.3


(1.5)


0.6


(1.2)

Net loss attributable to Unisys Corporation


$      (17.1)


$    (140.8)


$      (74.4)


$    (298.6)










Loss per share attributable to Unisys Corporation









Basic


$      (0.25)


$      (2.10)


$      (1.10)


$      (4.54)

Diluted


$      (0.25)


$      (2.10)


$      (1.10)


$      (4.54)

 

 

UNISYS CORPORATION

SEGMENT RESULTS

(Unaudited)

(Millions)




Total


DWS


CA&I


ECS


Other

Three Months Ended June 30, 2022











Customer revenue


$     515.0


$     127.2


$     130.1


$     185.8


$          71.9

Intersegment


?


?


?


?


?

Total revenue


$     515.0


$     127.2


$     130.1


$     185.8


$          71.9

Gross profit percent


28.8 %


13.0 %


5.5 %


66.2 %



Three Months Ended June 30, 2021











Customer revenue


$     517.3


$     148.4


$     121.7


$     171.5


$          75.7

Intersegment


?


?


?


0.4


(0.4)

Total revenue


$     517.3


$     148.4


$     121.7


$     171.9


$          75.3

Gross profit percent


27.5 %


15.4 %


11.1 %


61.6 %



 



Total


DWS


CA&I


ECS


Other

Six Months Ended June 30, 2022











Customer revenue


$     961.7


$     252.0


$     259.2


$     306.4


$        144.1

Intersegment


?


?


?


?


?

Total revenue


$     961.7


$     252.0


$     259.2


$     306.4


$        144.1

Gross profit percent


24.5 %


12.9 %


5.4 %


60.6 %



Six Months Ended June 30, 2021











Customer revenue


$  1,027.1


$     291.3


$     242.4


$     340.8


$        152.6

Intersegment


?


?


?


1.4


(1.4)

Total revenue


$  1,027.1


$     291.3


$     242.4


$     342.2


$        151.2

Gross profit percent


27.4 %


14.4 %


9.7 %


61.6 %



 

UNISYS CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(Millions)

June 30,
2022


December 31,
2021

Assets




Current assets:




Cash and cash equivalents

$           380.1


$            552.9

Accounts receivable, net

427.3


451.7

Contract assets

39.9


42.0

Inventories

12.7


7.6

Prepaid expenses and other current assets

94.1


78.8

Total current assets

954.1


1,133.0

Properties

462.6


468.0

Less-accumulated depreciation and amortization

381.9


381.5

Properties, net

80.7


86.5

Outsourcing assets, net

92.8


124.6

Marketable software, net

170.1


176.2

Operating lease right-of-use assets

56.7


62.7

Prepaid postretirement assets

160.5


159.7

Deferred income taxes

109.9


125.3

Goodwill

286.8


315.0

Intangible assets, net

57.2


34.9

Restricted cash

9.2


7.7

Assets held-for-sale

20.0


20.0

Other long-term assets

156.4


173.9

Total assets

$        2,154.4


$         2,419.5

Liabilities and deficit




Current liabilities:




Current maturities of long-term-debt

$             17.8


$             18.2

Accounts payable

149.2


180.2

Deferred revenue

227.5


253.2

Other accrued liabilities

251.3


300.9

Total current liabilities

645.8


752.5

Long-term debt

501.8


511.2

Long-term postretirement liabilities

884.5


976.2

Long-term deferred revenue

137.4


150.7

Long-term operating lease liabilities

40.4


46.1

Other long-term liabilities

43.0


47.2

Commitments and contingencies




Total Unisys Corporation stockholders' deficit

(147.2)


(113.7)

Noncontrolling interests

48.7


49.3

Total deficit

(98.5)


(64.4)

Total liabilities and deficit

$        2,154.4


$         2,419.5

 

UNISYS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Millions)




Six Months Ended

June 30,



2022


2021

Cash flows from operating activities





Consolidated net loss


$         (73.8)


$       (299.8)

Adjustments to reconcile consolidated net loss to net cash used for operating activities:





Foreign currency losses


0.4


1.2

Non-cash interest expense


0.7


1.2

Employee stock compensation


10.3


7.0

Depreciation and amortization of properties


19.2


15.2

Depreciation and amortization of outsourcing assets


36.0


33.2

Amortization of marketable software


29.6


34.4

Amortization of intangible assets


5.3


0.5

Other non-cash operating activities


0.2


(0.2)

Loss on disposal of capital assets


0.6


1.2

Postretirement contributions


(25.1)


(32.1)

Postretirement expense


22.7


394.7

Deferred income taxes, net


3.1


(65.2)

Changes in operating assets and liabilities, excluding the effect of acquisitions:





Receivables, net and contract assets


22.7


96.1

Inventories


(5.4)


7.4

Other assets


(9.3)


(5.5)

Accounts payable and current liabilities


(108.2)


(207.2)

Other liabilities


4.3


16.9

Net cash used for operating activities


(66.7)


(1.0)

Cash flows from investing activities





Purchase of businesses, net of cash acquired


(0.3)


(150.1)

Proceeds from investments


1,668.0


2,261.6

Purchases of investments


(1,697.6)


(2,262.4)

Investment in marketable software


(23.6)


(29.7)

Capital additions of properties


(14.0)


(12.0)

Capital additions of outsourcing assets


(6.5)


(8.7)

Other


(0.4)


(0.4)

Net cash used for investing activities


(74.4)


(201.7)

Cash flows from financing activities





Payments of long-term debt


(11.2)


(95.4)

Proceeds from issuance of long-term debt


?


1.5

Proceeds from exercise of stock options


?


3.7

Other


(3.8)


(7.7)

Net cash used for financing activities


(15.0)


(97.9)

Effect of exchange rate changes on cash, cash equivalents and restricted cash


(15.2)


0.1

Decrease in cash, cash equivalents and restricted cash


(171.3)


(300.5)

Cash, cash equivalents and restricted cash, beginning of period


560.6


906.7

Cash, cash equivalents and restricted cash, end of period


$        389.3


$        606.2

 

UNISYS CORPORATION

RECONCILIATIONS OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES

(Unaudited)

(Millions, except per share data)





Three Months Ended


Six Months Ended




June 30,


June 30,




2022


2021


2022


2021

GAAP net loss attributable to Unisys Corporation


$      (17.1)


$    (140.8)


$      (74.4)


$    (298.6)











Postretirement expense:

pretax


12.5


225.7


22.7


394.7


tax


?


52.0


0.2


52.4


net of tax


12.5


173.7


22.5


342.3











Cost reduction and other expenses:

pretax


20.8


13.6


40.9


32.7


tax


?


0.5


0.1


0.6


net of tax


20.8


13.1


40.8


32.1


noncontrolling interest


?


?


?


?


net of noncontrolling interest


20.8


13.1


40.8


32.1











Non-GAAP net income (loss) attributable to Unisys Corporation


$       16.2


$       46.0


$      (11.1)


$       75.8











Weighted average shares (thousands)


67,694


67,080


67,541


65,752

Plus incremental shares from assumed conversion:









Employee stock plans


418


740


?


903

Non-GAAP adjusted weighted average shares


68,112


67,820


67,541


66,655











Diluted earnings (loss) per share









GAAP basis









GAAP net loss attributable to Unisys Corporation for diluted loss
per share


$      (17.1)


$    (140.8)


$      (74.4)


$    (298.6)

Divided by weighted average shares


67,694


67,080


67,541


65,752

GAAP diluted loss per share


$      (0.25)


$      (2.10)


$      (1.10)


$      (4.54)











Non-GAAP basis









Non-GAAP net income (loss) attributable to Unisys Corporation for
diluted earnings (loss) per share


$       16.2


$       46.0


$      (11.1)


$       75.8

Divided by Non-GAAP adjusted weighted average shares

68,112


67,820


67,541


66,655

Non-GAAP diluted earnings (loss) per share

$       0.24


$       0.68


$      (0.16)


$       1.14

 

UNISYS CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP

 (Unaudited)

(Millions)


FREE CASH FLOW





Three Months Ended


Six Months Ended




June 30,


June 30,




2022


2021


2022


2021

Cash provided by (used for) operations


$      (33.7)


$       41.9


$      (66.7)


$        (1.0)

Additions to marketable software


(12.5)


(12.3)


(23.6)


(29.7)

Additions to properties


(8.8)


(6.9)


(14.0)


(12.0)

Additions to outsourcing assets


(4.1)


(3.7)


(6.5)


(8.7)

Free cash flow


(59.1)


19.0


(110.8)


(51.4)

Postretirement funding


8.9


10.5


25.1


32.1

Cost reduction and other payments, net


11.7


25.0


20.3


49.4

Adjusted free cash flow


$      (38.5)


$       54.5


$      (65.4)


$       30.1

 

 

 

UNISYS CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP

 (Unaudited)

(Millions)


EBITDA





Three Months Ended


Six Months Ended




June 30,


June 30,




2022


2021


2022


2021

Net loss attributable to Unisys Corporation


$      (17.1)


$    (140.8)


$      (74.4)


$    (298.6)

Net income (loss) attributable to noncontrolling interests


0.3


(1.5)


0.6


(1.2)

Interest expense, net of interest income of $3.4, $1.9, $5.8, $3.4,
respectively*


4.9


6.5


10.9


15.1

Provision for (benefit from) income taxes


20.3


(53.1)


24.4


(44.7)

Depreciation


26.5


24.7


55.2


48.4

Amortization


16.7


19.4


34.9


34.9

EBITDA


$       51.6


$    (144.8)


$       51.6


$    (246.1)










Postretirement expense


$       12.5


$     225.7


$       22.7


$     394.7

Cost reduction and other expenses**


17.9


10.1


32.9


29.2

Non-cash share based expense


3.5


3.7


10.0


7.0

Other expense, net adjustment***


4.9


(0.3)


7.4


3.5

Adjusted EBITDA


$       90.4


$       94.4


$     124.6


$     188.3











*Included in other (expense), net on the consolidated statements of income (loss)

**Reduced for depreciation and amortization included above

***Other expense, net as reported on the consolidated statements of income (loss) less postretirement expense, interest income
and items included in cost reduction and other expenses

 




Three Months Ended


Six Months Ended




June 30,


June 30,




2022


2021


2022


2021

Revenue



$ 515.0


$ 517.3


$ 961.7


$ 1,027.1

Net loss attributable to Unisys Corporation as a percentage of revenue


(3.3) %


(27.2) %


(7.7) %


(29.1) %

Non-GAAP net  income (loss) attributable to Unisys Corporation as a
percentage of revenue


3.1 %


8.9 %


(1.2) %


7.4 %

Adjusted EBITDA as a percentage of revenue


17.6 %


18.2 %


13.0 %


18.3 %

 

UNISYS CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP

 (Unaudited)

(Millions)


OPERATING PROFIT




Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021

GAAP operating income


$   33.7


$   40.8


$   10.2


$   84.4

Cost reduction and other expenses*


12.3


8.7


21.2


15.2

Postretirement expense**


0.6


0.6


1.1


1.9

Non-GAAP operating profit


$   46.6


$   50.1


$   32.5


$ 101.5










Revenue


$ 515.0


$ 517.3


$ 961.7


$ 1,027.1










GAAP operating profit percent


6.5 %


7.9 %


1.1 %


8.2 %

Non-GAAP operating profit percent


9.0 %


9.7 %


3.4 %


9.9 %










*Included in cost of revenue, selling, general and administrative and research and development on the consolidated statements of
income (loss)

**Included in selling, general and administrative on the consolidated statements of income (loss)

 

SOURCE Unisys Corporation


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