Company Exceeds 2023 Upwardly Revised Revenue and
Profitability Guidance, Delivers Strong Growth in Contract Signings
in 4Q
- Full-year revenue growth of 1.8% year over year (YoY), or 1.6%
in constant currency(1); Excluding License and Support
(Ex-L&S)(15) revenue growth of 4.9% YoY both as
reported and in constant currency
- 4Q revenue up 0.1% YoY, a decline of 2.1% in constant currency;
4Q Ex-L&S revenue growth of 6.8% YoY, or 4.3% in constant
currency
- Full-year operating profit margin of 3.8%; non-GAAP operating
profit(8) margin of 7.0%
- Full-year operating cash flow of $74.2
million compared to $12.7
million for 2022, and free cash flow(11) of
($4.5) million compared to
($73.2) million for 2022
- Ex-L&S Total Contract Value (TCV)(4) increased
27% YoY for the full-year and 137% YoY in the fourth quarter,
including New Business(6) TCV growth of 18% YoY for the
full-year and 84% YoY in the fourth quarter
- Company issues full-year 2024 guidance of (1.5)% to 1.5% YoY
constant currency revenue growth and 5.5% to 7.5% non-GAAP
operating profit margin
- Constant currency revenue guidance implies (1.0)% to 2.0%
revenue growth as reported, based on recent exchange rates, and
assumes Ex-L&S full-year revenue growth of 1.5% to 5.0% and
License and Support (L&S)(14) revenue of
approximately $375 million
BLUE
BELL, Pa., Feb. 21, 2024 /PRNewswire/ -- Unisys
(NYSE: UIS) reported financial results for the fourth quarter and
full year 2023.
"Our fourth quarter performance capped a successful year for
Unisys," said Unisys Chair and CEO Peter A.
Altabef. "In 2023, we exceeded our upwardly revised
full-year guidance ranges. During the year, we grew our backlog,
signed 18% more New Business TCV than the prior year, and expanded
our New Business pipeline."
"This year, we progressed towards our long-term financial
goals," said Unisys Chief Financial Officer Deb McCann. "We are particularly pleased with
our full-year free cash flow performance, which improved by nearly
$70 million year-over-year. We also
continued to execute our pension management strategy with two
annuity purchases that transferred an aggregate of approximately
$500 million in pension liabilities
to a third-party insurer."
Financial Highlights
Please refer to the
accompanying financial tables for a reconciliation of the GAAP to
non-GAAP measures presented except for financial guidance since
such a reconciliation is not practicable without unreasonable
effort.
(In millions, except
numbers presented as percentages)
|
|
4Q23
|
|
4Q22
|
|
FY23
|
|
FY22
|
Revenue
|
|
$557.6
|
|
$557.0
|
|
$2,015.4
|
|
$1,979.9
|
YoY revenue
growth
|
|
0.1 %
|
|
|
|
1.8 %
|
|
|
YoY revenue growth
in constant currency
|
|
(2.1) %
|
|
|
|
1.6 %
|
|
|
Ex-L&S
revenue
|
|
$413.3
|
|
$386.9
|
|
$1,586.3
|
|
$1,511.9
|
YoY revenue
growth
|
|
6.8 %
|
|
|
|
4.9 %
|
|
|
YoY revenue growth
in constant currency
|
|
4.3 %
|
|
|
|
4.9 %
|
|
|
L&S
revenue
|
|
$144.3
|
|
$170.1
|
|
$429.1
|
|
$468.0
|
YoY revenue
growth
|
|
(15.2) %
|
|
|
|
(8.3) %
|
|
|
YoY revenue growth
in constant currency
|
|
(16.9) %
|
|
|
|
(9.0) %
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
$181.2
|
|
$189.8
|
|
$551.3
|
|
$529.6
|
Gross profit
percent
|
|
32.5 %
|
|
34.1 %
|
|
27.4 %
|
|
26.7 %
|
Ex-L&S gross
profit
|
|
$68.4
|
|
$45.7
|
|
$240.0
|
|
$168.8
|
Ex-L&S gross
profit percent
|
|
16.5 %
|
|
11.8 %
|
|
15.1 %
|
|
11.2 %
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
$44.0
|
|
$50.0
|
|
$76.9
|
|
$52.2
|
Operating profit
percent
|
|
7.9 %
|
|
9.0 %
|
|
3.8 %
|
|
2.6 %
|
Non-GAAP operating
profit
|
|
$64.0
|
|
$112.4
|
|
$140.8
|
|
$159.0
|
Non-GAAP operating
profit percent
|
|
11.5 %
|
|
20.2 %
|
|
7.0 %
|
|
8.0 %
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to Unisys Corporation
|
|
($165.3)
|
|
$8.5
|
|
($430.7)
|
|
($106.0)
|
Non-GAAP net income
attributable to Unisys Corporation(10)
|
|
$35.4
|
|
$82.8
|
|
$41.7
|
|
$74.8
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
($103.6)
|
|
$85.1
|
|
($204.5)
|
|
$140.9
|
Adjusted
EBITDA(9)
|
|
$100.4
|
|
$148.7
|
|
$285.9
|
|
$325.8
|
Adjusted EBITDA as a
percentage of revenue
|
18.0 %
|
|
26.7 %
|
|
14.2 %
|
|
16.5 %
|
Fourth Quarter 2023 Results
Revenue was up 0.1% YoY, a decline of 2.1% in constant currency.
Gross profit margin was down 160 bps YoY driven by the timing of
software license renewals.
Ex-L&S revenue increased 6.8% YoY, or 4.3% in constant
currency, primarily driven by New Business with existing clients.
Gross profit margin was up 470 bps YoY primarily driven by lower
cost reduction charges as well as New Business with existing
clients.
Net loss attributable to Unisys Corporation included a non-cash
pension settlement loss of $167.2
million related to the purchase of an annuity contract that
reduced pension liabilities.
Financial Highlights by Segment
(In millions, except
numbers presented as percentages)
|
|
4Q23
|
|
4Q22
|
|
FY23
|
|
FY22
|
Digital Workplace
Solutions (DWS):
|
|
|
|
|
|
|
|
|
Revenue
|
|
$139.2
|
|
$127.8
|
|
$546.1
|
|
$509.9
|
YoY revenue
growth
|
|
8.9 %
|
|
|
|
7.1 %
|
|
|
YoY revenue growth
in constant currency
|
|
6.3 %
|
|
|
|
7.0 %
|
|
|
Gross
profit
|
|
$21.3
|
|
$19.3
|
|
$76.2
|
|
$71.5
|
Gross profit
percent
|
|
15.3 %
|
|
15.1 %
|
|
14.0 %
|
|
14.0 %
|
|
|
|
|
|
|
|
|
|
Cloud, Applications
& Infrastructure Solutions (CA&I):
|
|
|
|
|
|
|
|
|
Revenue
|
|
$138.9
|
|
$138.8
|
|
$531.0
|
|
$520.3
|
YoY revenue
growth
|
|
0.1 %
|
|
|
|
2.1 %
|
|
|
YoY revenue growth
in constant currency
|
|
(0.5) %
|
|
|
|
2.2 %
|
|
|
Gross
profit
|
|
$22.7
|
|
$26.4
|
|
$81.9
|
|
$47.3
|
Gross profit
percent
|
|
16.3 %
|
|
19.0 %
|
|
15.4 %
|
|
9.1 %
|
|
|
|
|
|
|
|
|
|
Enterprise Computing
Solutions (ECS):
|
|
|
|
|
|
|
|
|
Revenue
|
|
$203.0
|
|
$225.6
|
|
$648.0
|
|
$669.7
|
YoY revenue
growth
|
|
(10.0) %
|
|
|
|
(3.2) %
|
|
|
YoY revenue growth
in constant currency
|
|
(12.2) %
|
|
|
|
(3.9) %
|
|
|
Gross
profit
|
|
$136.9
|
|
$165.4
|
|
$396.6
|
|
$432.0
|
Gross profit
percent
|
|
67.4 %
|
|
73.3 %
|
|
61.2 %
|
|
64.5 %
|
Fourth Quarter 2023 Segment Results
DWS revenue increased 8.9% YoY, or a 6.3% increase in
constant currency. DWS gross profit margin was 15.3%, an increase
of 20 bps YoY. The increase in revenue and gross profit margin was
primarily driven by New Business with existing clients.
CA&I revenue increased 0.1% YoY, a 0.5% decline in
constant currency. CA&I gross profit margin was 16.3%, a
decrease of 270 bps YoY, as the prior year quarter gross profit
included a benefit from the sale of surplus IP addresses. Full-year
CA&I gross profit was 15.4%, up 630 bps, as the result of
delivery improvements.
ECS revenue declined in the fourth quarter 10.0% YoY, or a
12.2% decline in constant currency. ECS gross profit margin was
67.4%, a decrease of 590 bps YoY. The decrease in revenue and gross
profit margin was primarily driven by the timing of software
license renewals, as expected.
Balance Sheet and Cash Flow
(In
millions)
|
|
4Q23
|
|
4Q22
|
|
FY23
|
|
FY22
|
Cash and cash
equivalents
|
|
|
|
|
|
$387.7
|
|
$391.8
|
|
|
|
|
|
|
|
|
|
Cash provided by
operations
|
|
$23.0
|
|
$34.9
|
|
$74.2
|
|
$12.7
|
Free cash
flow
|
|
$4.0
|
|
$13.8
|
|
($4.5)
|
|
($73.2)
|
Pre-pension free cash
flow
|
|
$10.7
|
|
$23.6
|
|
$43.5
|
|
($29.5)
|
Adjusted free cash
flow(13)
|
|
$30.9
|
|
$39.3
|
|
$120.5
|
|
$27.0
|
Full-year 2023 free cash flow improved by $68.7 million YoY due to improvements in
working capital.
Cash and cash equivalents at December 31,
2023 were $387.7 million.
The company continued its pension de-risking strategy during
2023 with the purchase of two annuity contracts relating to its
U.S. pension plans. The aggregate purchase price for the two
transactions was approximately $516 million, which was
funded by plan assets and resulted in a similarly sized reduction
in plan liabilities. These actions resulted in non-cash pension
settlement losses of $348.2 million.
Other Key Performance Metrics
|
|
YoY
Change
|
|
QoQ
Change*
|
|
4Q23
|
|
|
|
|
|
Pipeline(3)
|
|
|
|
|
|
Total
company
|
|
(1) %
|
|
(20) %
|
|
Ex-L&S
pipeline
|
|
(1) %
|
|
(20) %
|
|
TCV
|
|
|
|
|
|
Total
company
|
|
50 %
|
|
331 %
|
|
Ex-L&S
TCV
|
|
137 %
|
|
339 %
|
|
FY23
|
|
|
|
|
|
TCV
|
|
|
|
|
|
Total
company
|
|
3 %
|
|
|
|
Ex-L&S
TCV
|
|
27 %
|
|
|
|
|
*
QoQ - quarter over quarter
|
Sequential pipeline decline was due to elevated client signings
during the fourth quarter while YoY decline was the result of
renewal timing, partially offset by growth in New Business
pipeline.
In the fourth quarter and full-year of 2023, TCV growth was
driven by strong growth in New Business TCV.
Backlog was $3.01 billion for
the fourth quarter 2023 compared to $2.92
billion for the fourth quarter of 2022 and $2.38 billion in the third quarter of 2023. The
sequential and YoY increase was primarily driven by timing of
Ex-L&S contract renewals and strong New Business signings
during the fourth quarter.
2024 Financial Guidance
The company has issued full-year 2024 revenue growth and
profitability guidance:
|
Guidance
|
Revenue growth in
constant currency
|
(1.5)%
to 1.5%
|
Non-GAAP operating
profit margin
|
5.5%
to 7.5%
|
Constant currency revenue guidance implies (1.0)% to 2.0%
revenue growth as reported, based on recent exchanges rates, and
assumes Ex-L&S full-year revenue growth of 1.5% to 5.0% and
L&S revenue of approximately $375
million.
Conference Call
Unisys will hold a conference call with the financial community
on Wednesday, February 21 at
8 a.m. Eastern Time to discuss the
results and 2024 financial guidance.
The live, listen-only webcast, as well as the accompanying
presentation materials, can be accessed on the Unisys Investor
Website at www.unisys.com/investor. In addition, domestic callers
can dial 1-844-695-5518 and international callers can dial
1-412-902-6749 and provide the following conference passcode:
Unisys Corporation Call.
A webcast replay will be available on the Unisys Investor
Website shortly following the conference call. A replay will also
be available by dialing 1-877-344-7529 for domestic callers or
1-412-317-0088 for international callers and entering access code
4909173 from two hours after the end of the call until March 6, 2024.
(1) Constant currency – A significant
amount of the company's revenue is derived from international
operations. As a result, the company's revenue has been and will
continue to be affected by changes in the U.S. dollar against major
international currencies. The company refers to revenue 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 revenue at a consistent exchange rate
rather than the actual exchange rates in effect during the
respective periods.
(2) Backlog – Represents future revenue
associated with contracted work which has not yet been delivered or
performed. Although the company believes this revenue will be
recognized, it may, for commercial reasons, allow the orders to be
cancelled, with or without penalty.
(3) Pipeline – Represents qualified
prospective sale opportunities for which bids have been submitted
or vetted prospective sales opportunities which are being actively
pursued. There is no assurance that pipeline will translate into
recorded revenue.
(4) Total Contract Value (TCV) –
Represents the estimated revenue related to contracts signed in the
period without regard for cancellation terms. New Business TCV
represents TCV attributable to expansion and new scope for existing
clients and new logo contracts.
(5) Book-to-bill – Represents total
contract value booked divided by revenue in a given period.
(6) New Business – Represents expansion
and new scope for existing clients and new logo contracts.
(7) Next-Gen Solutions – Includes
our Modern Workplace solutions within DWS, Digital Platforms and
Applications (DP&A) solutions within CA&I, Specialized
Services and Next-Gen Compute (SS&C) solutions within ECS, as
well as Micro-Market solutions. The company uses estimated Next-Gen
Solutions metrics to provide insight into the company's progress in
shifting the revenue mix towards solutions that are generally
higher-growth and higher-margin.
(8) Non-GAAP operating profit – This
measure excludes pretax postretirement expense and pretax charges
in connection with certain legal matters related to professional
services and legal fees, including legal defense costs, associated
with certain legal proceedings, and cost-reduction activities and
other expenses.
(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 (loss) attributable to
noncontrolling interests, interest expense (net of interest
income), provision for (benefit from) income taxes, depreciation
and amortization. Adjusted EBITDA further excludes
postretirement expense; certain legal matters related to
professional services and legal fees, including legal defense
costs, associated with certain legal proceedings; environmental
matters related to previously disposed businesses; cost-reduction
activities and other expenses, non-cash share-based expense, and
other (income) expense adjustments.
(10) Non-GAAP net income and non-GAAP diluted
earnings per share – These measures excluded postretirement
expense and charges in connection with certain legal matters
related to professional services and legal fees, including legal
defense costs, associated with certain legal proceedings;
environmental matters related to previously disposed businesses;
and cost-reduction activities and other expenses. The tax
amounts related to these items for the calculation of non-GAAP
diluted earnings (loss) per share include the current and deferred
tax expense and benefits recognized under GAAP for these items.
(11) Free cash flow – Represents cash
flow from operations less capital expenditures.
(12) Pre-pension free cash flow –
Represents free cash flow before postretirement contributions.
(13) Adjusted free cash flow – Represents
free cash flow less cash used for postretirement funding; certain
legal matters related to professional services and legal fees,
including legal defense costs, associated with certain legal
proceedings; environmental matters related to previously disposed
businesses; and cost-reduction activities and other payments.
(14) License and Support (L&S) –
Represents software license and related support revenue within the
company's ECS segment.
(15) Excluding License and Support
(Ex-L&S) – These measures exclude revenue, gross profit
and gross profit margin in connection with software license and
support revenue within the company's ECS segment. The company
provides these measures to allow investors to isolate the impact of
software license renewals, which tend to be significant and
impactful based on timing, and related support services in order to
evaluate the company's business outside of these areas.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
Section 21E of the Securities Exchange Act of 1934, as amended, and
the Private Securities Litigation Reform Act of 1995. Unisys
cautions readers that the assumptions forming the basis for
forward-looking statements include many factors that are beyond
Unisys' ability to control or estimate precisely, such as estimates
of future market conditions, the behavior of other market
participants and that TCV is based, in part, on the assumption that
each of those contracts will continue for their full contracted
term. Words such as "anticipates," "estimates," "expects,"
"projects," "may," "will," "intends," "plans," "believes," "should"
and similar expressions may identify forward-looking statements and
such forward-looking statements are made based upon management's
current expectations, assumptions and beliefs as of this date
concerning future developments and their potential effect upon
Unisys. There can be no assurance that future developments will be
in accordance with management's expectations, assumptions and
beliefs or that the effect of future developments on Unisys will be
those anticipated by management. Forward-looking statements in this
release and the accompanying presentation include, but are not
limited to, any projections or expectations of revenue growth,
margin expansion, achievement of operational efficiencies and
savings, future growth of our Next-Gen solutions, TCV and New
Business TCV, backlog, pipeline, book-to-bill, full-year 2024
revenue growth and profitability guidance, including constant
currency revenue, Ex-L&S revenue growth, L&S revenue,
non-GAAP operating profit margin and the assumptions and other
expectations made in connection with our full-year 2024 financial
guidance, our pension liability and statements regarding future
economic conditions or performance.
Additional information and factors that could cause actual
results to differ materially from Unisys' expectations are
contained in Unisys' filings with the U.S. Securities and Exchange
Commission (SEC), including Unisys' Annual Reports on Form 10-K and
subsequent Quarterly Reports on Form 10-Q, recent Current Reports
on Form 8-K, and other SEC filings, which are available at the
SEC's web site, http://www.sec.gov. Information included in this
release is representative as of the date of this release only and
while Unisys periodically reassesses material trends and
uncertainties affecting Unisys' results of operations and financial
condition in connection with its preparation of management's
discussion and analysis of results of operations and financial
condition contained in its Quarterly and Annual Reports filed with
the SEC, Unisys does not, by including this statement, assume any
obligation to review or revise any particular forward-looking
statement referenced herein in light of future events.
Non-GAAP Information
This release includes certain non-GAAP financial measures that
exclude certain items such as postretirement expense; certain legal
and other matters related to professional services and legal fees,
including legal defense costs, associated with certain legal
proceedings; environmental matters related to previously disposed
businesses; and cost-reduction activities and other expenses that
the company believes are not indicative of its ongoing operations,
as they may be unusual or non-recurring. The inclusion of such
items in financial measures can make the company's profitability
and liquidity results difficult to compare to prior periods or
anticipated future periods and can distort the visibility of trends
associated with the company's ongoing performance. Management also
believes that non-GAAP measures are useful to investors because
they provide supplemental information about the company's financial
performance and liquidity, as well as greater transparency into
management's view and assessment of the company's ongoing operating
performance.
Non-GAAP financial measures are often provided and utilized by
the company's management, analysts, and investors to enhance
comparability of year-over-year results and to isolate in some
instances the impact of software license renewals, which tend to be
lumpy, and related support services in order to evaluate the
company's business outside of these areas. These items are
uncertain, depend on various factors, and could have a material
impact on the company's GAAP results for the applicable period.
These measures should not be relied upon as substitutes for, or
considered in isolation from, measures calculated in accordance
with U.S. GAAP. A reconciliation of these non-GAAP financial
measures to the most directly comparable financial measures
calculated and reported in accordance with GAAP can be found below
except for financial guidance and other forward-looking information
since such a reconciliation is not practicable without unreasonable
efforts as the company is unable to reasonably forecast certain
amounts that are necessary for such reconciliation. This
information has been provided pursuant to the requirements of SEC
Regulation G.
About Unisys
Unisys is a global technology solutions company that powers
breakthroughs for the world's leading organizations. Our solutions
– cloud, data and AI, digital workplace, logistics and enterprise
computing – help our clients challenge the status quo and unlock
their full potential. To learn how we have been helping clients
push what's possible for 150 years, visit unisys.com and follow us
on LinkedIn.
RELEASE NO.: 0221/9939
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
(LOSS) (Unaudited) (Millions, except per
share data)
|
|
|
|
Three Months
Ended December
31,
|
|
Year
Ended December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
|
|
|
|
|
|
|
|
Services
|
|
$
429.8
|
|
$
409.7
|
|
$
1,665.9
|
|
$
1,597.3
|
Technology
|
|
127.8
|
|
147.3
|
|
349.5
|
|
382.6
|
|
|
557.6
|
|
557.0
|
|
2,015.4
|
|
1,979.9
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
Services
|
|
318.8
|
|
324.3
|
|
1,282.4
|
|
1,285.9
|
Technology
|
|
57.6
|
|
42.9
|
|
181.7
|
|
164.4
|
|
|
376.4
|
|
367.2
|
|
1,464.1
|
|
1,450.3
|
Selling, general and
administrative
|
|
129.0
|
|
132.9
|
|
450.3
|
|
453.2
|
Research and
development
|
|
8.2
|
|
6.9
|
|
24.1
|
|
24.2
|
|
|
513.6
|
|
507.0
|
|
1,938.5
|
|
1,927.7
|
Operating
income
|
|
44.0
|
|
50.0
|
|
76.9
|
|
52.2
|
Interest
expense
|
|
7.9
|
|
7.8
|
|
30.8
|
|
32.4
|
Other (expense),
net
|
|
(176.7)
|
|
(16.2)
|
|
(393.9)
|
|
(82.4)
|
(Loss) earnings
before income taxes
|
|
(140.6)
|
|
26.0
|
|
(347.8)
|
|
(62.6)
|
Provision for income
taxes
|
|
23.6
|
|
17.2
|
|
79.3
|
|
42.3
|
Consolidated net
(loss) earnings
|
|
(164.2)
|
|
8.8
|
|
(427.1)
|
|
(104.9)
|
Net income attributable
to noncontrolling interests
|
|
1.1
|
|
0.3
|
|
3.6
|
|
1.1
|
Net (loss) income
attributable to Unisys Corporation
|
|
$
(165.3)
|
|
$
8.5
|
|
$
(430.7)
|
|
$
(106.0)
|
(Loss) earnings per
share attributable to Unisys Corporation
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(2.42)
|
|
$
0.13
|
|
$
(6.31)
|
|
$
(1.57)
|
Diluted
|
|
$
(2.42)
|
|
$
0.12
|
|
$
(6.31)
|
|
$
(1.57)
|
UNISYS
CORPORATION SEGMENT
RESULTS (Unaudited) (Millions)
|
|
|
|
Total
|
|
DWS
|
|
CA&I
|
|
ECS
|
|
Other
|
Three Months Ended
December 31, 2023
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
557.6
|
|
$
139.2
|
|
$
138.9
|
|
$
203.0
|
|
$
76.5
|
Gross profit
percent
|
|
32.5 %
|
|
15.3 %
|
|
16.3 %
|
|
67.4 %
|
|
|
Three Months Ended
December 31, 2022
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
557.0
|
|
$
127.8
|
|
$
138.8
|
|
$
225.6
|
|
$
64.8
|
Gross profit
percent
|
|
34.1 %
|
|
15.1 %
|
|
19.0 %
|
|
73.3 %
|
|
|
|
|
|
|
Total
|
|
DWS
|
|
CA&I
|
|
ECS
|
|
Other
|
Year Ended December
31, 2023
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
2,015.4
|
|
$
546.1
|
|
$
531.0
|
|
$
648.0
|
|
$
290.3
|
Gross profit
percent
|
|
27.4 %
|
|
14.0 %
|
|
15.4 %
|
|
61.2 %
|
|
|
Year Ended December
31, 2022
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
1,979.9
|
|
$
509.9
|
|
$
520.3
|
|
$
669.7
|
|
$
280.0
|
Gross profit
percent
|
|
26.7 %
|
|
14.0 %
|
|
9.1 %
|
|
64.5 %
|
|
|
UNISYS
CORPORATION CONSOLIDATED BALANCE
SHEETS (Unaudited) (Millions)
|
|
|
December 31,
2023
|
|
December 31,
2022
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
387.7
|
|
$
391.8
|
Accounts receivable,
net
|
454.5
|
|
402.5
|
Contract
assets
|
11.7
|
|
28.9
|
Inventories
|
15.3
|
|
14.9
|
Prepaid expenses and
other current assets
|
101.8
|
|
92.3
|
Total current
assets
|
971.0
|
|
930.4
|
Properties
|
396.4
|
|
410.8
|
Less – Accumulated
depreciation and amortization
|
332.1
|
|
334.9
|
Properties,
net
|
64.3
|
|
75.9
|
Outsourcing assets,
net
|
31.6
|
|
66.4
|
Marketable software,
net
|
166.2
|
|
165.1
|
Operating lease
right-of-use assets
|
35.4
|
|
42.5
|
Prepaid postretirement
assets
|
38.0
|
|
119.5
|
Deferred income
taxes
|
114.0
|
|
118.6
|
Goodwill
|
287.4
|
|
287.1
|
Intangible assets,
net
|
42.7
|
|
52.4
|
Restricted
cash
|
9.0
|
|
10.9
|
Assets
held-for-sale
|
4.9
|
|
6.4
|
Other long-term
assets
|
200.9
|
|
190.4
|
Total
assets
|
$
1,965.4
|
|
$
2,065.6
|
Total liabilities
and (deficit) equity
|
|
|
|
Current
liabilities:
|
|
|
|
Current maturities of
long-term debt
|
$
13.0
|
|
$
17.4
|
Accounts
payable
|
130.9
|
|
160.8
|
Deferred
revenue
|
198.6
|
|
200.7
|
Other accrued
liabilities
|
308.4
|
|
271.6
|
Total current
liabilities
|
650.9
|
|
650.5
|
Long-term
debt
|
491.2
|
|
495.7
|
Long-term
postretirement liabilities
|
787.7
|
|
714.6
|
Long-term deferred
revenue
|
104.4
|
|
122.3
|
Long-term operating
lease liabilities
|
25.6
|
|
29.7
|
Other long-term
liabilities
|
44.0
|
|
31.0
|
Commitments and
contingencies
|
|
|
|
Total Unisys
Corporation stockholders' deficit
|
(151.8)
|
|
(14.7)
|
Noncontrolling
interests
|
13.4
|
|
36.5
|
Total (deficit)
equity
|
(138.4)
|
|
21.8
|
Total liabilities
and (deficit) equity
|
$
1,965.4
|
|
$
2,065.6
|
UNISYS
CORPORATION CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) (Millions)
|
|
|
|
Year
Ended December
31,
|
|
|
2023
|
|
2022
|
Cash flows from
operating activities
|
|
|
|
|
Consolidated net
loss
|
|
$
(427.1)
|
|
$
(104.9)
|
Adjustments to
reconcile consolidated net loss to net cash provided by operating
activities:
|
|
|
|
|
Foreign currency
losses
|
|
0.2
|
|
6.8
|
Non-cash interest
expense
|
|
1.2
|
|
1.3
|
Employee stock
compensation
|
|
17.2
|
|
20.0
|
Depreciation and
amortization of properties
|
|
29.1
|
|
50.2
|
Depreciation and
amortization of outsourcing assets
|
|
50.3
|
|
64.5
|
Amortization of
marketable software
|
|
49.7
|
|
58.7
|
Amortization of
intangible assets
|
|
9.7
|
|
10.1
|
Other non-cash
operating activities
|
|
(0.2)
|
|
0.3
|
Loss on disposal of
capital assets
|
|
6.0
|
|
6.6
|
Postretirement
contributions
|
|
(48.0)
|
|
(43.7)
|
Postretirement
expense
|
|
388.5
|
|
45.3
|
Deferred income taxes,
net
|
|
24.5
|
|
(8.3)
|
Changes in operating
assets and liabilities, excluding the effects of
acquisitions:
|
|
|
|
|
Receivables, net and
contract assets
|
|
4.2
|
|
15.5
|
Inventories
|
|
—
|
|
(8.0)
|
Other
assets
|
|
(25.5)
|
|
(2.6)
|
Accounts payable and
current liabilities
|
|
(20.9)
|
|
(103.8)
|
Other
liabilities
|
|
15.3
|
|
4.7
|
Net cash provided by
operating activities
|
|
74.2
|
|
12.7
|
Cash flows from
investing activities
|
|
|
|
|
Proceeds from
investments
|
|
2,751.6
|
|
3,336.1
|
Purchases of
investments
|
|
(2,740.4)
|
|
(3,380.4)
|
Capital additions of
properties
|
|
(21.3)
|
|
(31.0)
|
Capital additions of
outsourcing assets
|
|
(11.4)
|
|
(8.6)
|
Investment in
marketable software
|
|
(46.0)
|
|
(46.3)
|
Purchases of
businesses, net of cash acquired
|
|
(1.2)
|
|
(0.3)
|
Other
|
|
(0.9)
|
|
(0.9)
|
Net cash used for
investing activities
|
|
(69.6)
|
|
(131.4)
|
Cash flows from
financing activities
|
|
|
|
|
Payments of long-term
debt
|
|
(16.9)
|
|
(17.8)
|
Other
|
|
(0.4)
|
|
(3.8)
|
Net cash used for
financing activities
|
|
(17.3)
|
|
(21.6)
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
6.7
|
|
(17.6)
|
Decrease in cash,
cash equivalents and restricted cash
|
|
(6.0)
|
|
(157.9)
|
Cash, cash
equivalents and restricted cash, beginning of period
|
|
402.7
|
|
560.6
|
Cash, cash
equivalents and restricted cash, end of period
|
|
$
396.7
|
|
$
402.7
|
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,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net (loss) income
attributable to Unisys Corporation
|
|
$
(165.3)
|
|
$
8.5
|
|
$
(430.7)
|
|
$
(106.0)
|
Postretirement
expense
|
pretax
|
|
174.4
|
|
11.2
|
|
388.5
|
|
45.3
|
|
tax
|
|
(0.1)
|
|
0.1
|
|
(0.7)
|
|
0.5
|
|
net of tax
|
|
174.5
|
|
11.1
|
|
389.2
|
|
44.8
|
Certain legal
matters
|
pretax
|
|
11.9
|
|
6.8
|
|
35.7
|
|
16.0
|
|
tax
|
|
—
|
|
—
|
|
—
|
|
—
|
|
net of tax
|
|
11.9
|
|
6.8
|
|
35.7
|
|
16.0
|
Environmental
matters
|
pretax
|
|
7.0
|
|
6.6
|
|
24.7
|
|
32.4
|
|
tax
|
|
—
|
|
—
|
|
—
|
|
—
|
|
net of tax
|
|
7.0
|
|
6.6
|
|
24.7
|
|
32.4
|
Cost reduction and
other expenses
|
pretax
|
|
7.6
|
|
53.2
|
|
23.8
|
|
91.1
|
|
tax
|
|
0.3
|
|
3.4
|
|
1.0
|
|
3.5
|
|
net of tax
|
|
7.3
|
|
49.8
|
|
22.8
|
|
87.6
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
attributable to Unisys Corporation
|
|
$
35.4
|
|
$
82.8
|
|
$
41.7
|
|
$
74.8
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
(thousands)
|
|
68,402
|
|
67,793
|
|
68,254
|
|
67,665
|
Plus incremental shares
from assumed conversion:
|
|
|
|
|
|
|
|
|
Employee stock
plans
|
|
1,365
|
|
331
|
|
945
|
|
481
|
Non-GAAP adjusted
weighted average shares
|
|
69,767
|
|
68,124
|
|
69,199
|
|
68,146
|
Diluted earnings
(loss) per share
|
|
|
|
|
|
|
|
|
GAAP
basis
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to Unisys Corporation
|
|
$ (165.3)
|
|
$
8.5
|
|
$ (430.7)
|
|
$ (106.0)
|
Divided by weighted
average shares
|
|
68,402
|
|
68,124
|
|
68,254
|
|
67,665
|
Diluted (loss)
earnings per share
|
|
$
(2.42)
|
|
$
0.12
|
|
$
(6.31)
|
|
$
(1.57)
|
Non-GAAP
basis
|
|
|
|
|
|
|
|
|
Non-GAAP net income
attributable to Unisys Corporation for diluted
earnings per share
|
|
$
35.4
|
|
$
82.8
|
|
$
41.7
|
|
$
74.8
|
Divided by Non-GAAP
adjusted weighted average shares
|
69,767
|
|
68,124
|
|
69,199
|
|
68,146
|
Non-GAAP diluted
earnings per share
|
$
0.51
|
|
$
1.22
|
|
$
0.60
|
|
$
1.10
|
UNISYS
CORPORATION RECONCILIATIONS OF GAAP TO
NON-GAAP (Unaudited)
(Millions)
|
|
FREE CASH
FLOW
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash provided by
operations
|
|
$
23.0
|
|
$
34.9
|
|
$
74.2
|
|
$
12.7
|
Additions to marketable
software
|
|
(13.1)
|
|
(11.1)
|
|
(46.0)
|
|
(46.3)
|
Additions to
properties
|
|
(5.9)
|
|
(9.5)
|
|
(21.3)
|
|
(31.0)
|
Additions to
outsourcing assets
|
|
—
|
|
(0.5)
|
|
(11.4)
|
|
(8.6)
|
Free cash
flow
|
|
4.0
|
|
13.8
|
|
(4.5)
|
|
(73.2)
|
Postretirement
funding
|
|
6.7
|
|
9.8
|
|
48.0
|
|
43.7
|
Pre-pension free
cash flow
|
|
10.7
|
|
23.6
|
|
43.5
|
|
(29.5)
|
Certain legal
payments
|
|
9.7
|
|
—
|
|
30.2
|
|
5.5
|
Environmental matters
payments
|
|
7.2
|
|
11.2
|
|
21.8
|
|
28.1
|
Cost reduction and
other payments
|
|
3.3
|
|
4.5
|
|
25.0
|
|
22.9
|
Adjusted free cash
flow
|
|
$
30.9
|
|
$
39.3
|
|
$
120.5
|
|
$
27.0
|
UNISYS
CORPORATION RECONCILIATIONS OF GAAP TO
NON-GAAP (Unaudited)
(Millions)
|
|
EBITDA
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net (loss) income
attributable to Unisys Corporation
|
|
$
(165.3)
|
|
$
8.5
|
|
$
(430.7)
|
|
$
(106.0)
|
Net income attributable
to noncontrolling interests
|
|
1.1
|
|
0.3
|
|
3.6
|
|
1.1
|
Interest expense, net
of interest income of $6.3, $3.7, $26.3, $12.4
respectively(1)
|
|
1.6
|
|
4.1
|
|
4.5
|
|
20.0
|
Provision for income
taxes
|
|
23.6
|
|
17.2
|
|
79.3
|
|
42.3
|
Depreciation
|
|
21.0
|
|
36.6
|
|
79.4
|
|
114.7
|
Amortization
|
|
14.4
|
|
18.4
|
|
59.4
|
|
68.8
|
EBITDA
|
|
$
(103.6)
|
|
$
85.1
|
|
$
(204.5)
|
|
$
140.9
|
|
|
|
|
|
|
|
|
|
Postretirement
expense
|
|
$
174.4
|
|
$
11.2
|
|
$
388.5
|
|
$
45.3
|
Certain legal
matters(2)
|
|
11.9
|
|
6.8
|
|
35.7
|
|
16.0
|
Environmental
matters(1)
|
|
7.0
|
|
6.6
|
|
24.7
|
|
32.4
|
Cost reduction and
other expenses(3)
|
|
4.5
|
|
30.2
|
|
13.5
|
|
55.4
|
Non-cash share based
expense
|
|
4.1
|
|
4.3
|
|
16.6
|
|
19.0
|
Other expense, net
adjustment(4)
|
|
2.1
|
|
4.5
|
|
11.4
|
|
16.8
|
Adjusted
EBITDA
|
|
$
100.4
|
|
$
148.7
|
|
$
285.9
|
|
$
325.8
|
|
|
|
|
|
|
|
|
|
|
(1) Included
in other (expense), net on the consolidated statements of income
(loss)
|
|
|
|
|
(2) Included
in selling, general and administrative expenses and other
(expense), net within the consolidated statements of income
(loss)
|
(3) Reduced
for depreciation and amortization included above
|
|
|
|
|
(4) Other
expense, net as reported on the consolidated statements of income
(loss) less postretirement expense, interest income and items
included in environmental matters, cost reduction and other
expenses
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
|
|
$
557.6
|
|
$
557.0
|
|
$
2,015.4
|
|
$
1,979.9
|
Net (loss) earnings
attributable to Unisys Corporation as a percentage of
revenue
|
|
(29.6) %
|
|
1.5 %
|
|
(21.4) %
|
|
(5.4) %
|
Non-GAAP net income
attributable to Unisys Corporation as a
percentage of revenue
|
|
6.3 %
|
|
14.9 %
|
|
2.1 %
|
|
3.8 %
|
Adjusted EBITDA as a
percentage of revenue
|
|
18.0 %
|
|
26.7 %
|
|
14.2 %
|
|
16.5 %
|
UNISYS
CORPORATION RECONCILIATIONS OF GAAP TO
NON-GAAP (Unaudited)
(Millions)
|
|
OPERATING
PROFIT
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Operating
profit
|
|
$ 44.0
|
|
$ 50.0
|
|
$ 76.9
|
|
$ 52.2
|
Certain legal
matters(1)
|
|
11.4
|
|
6.8
|
|
35.2
|
|
16.0
|
Cost reduction and
other expenses(2)
|
|
8.4
|
|
55.1
|
|
27.4
|
|
88.7
|
Postretirement
expense(1)
|
|
0.2
|
|
0.5
|
|
1.3
|
|
2.1
|
Non-GAAP operating
profit
|
|
$ 64.0
|
|
$
112.4
|
|
$
140.8
|
|
$
159.0
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
557.6
|
|
$
557.0
|
|
$
2,015.4
|
|
$
1,979.9
|
|
|
|
|
|
|
|
|
|
Operating profit
percent
|
|
7.9 %
|
|
9.0 %
|
|
3.8 %
|
|
2.6 %
|
Non-GAAP operating
profit percent
|
|
11.5 %
|
|
20.2 %
|
|
7.0 %
|
|
8.0 %
|
|
|
|
|
|
|
|
|
|
(1) Included
in selling, general and administrative expenses within the
consolidated statements of income (loss)
|
(2) Included
in cost of revenue, selling, general and administrative and
research and development on the consolidated statements of
income
(loss)
|
EXCLUDING LICENSE
AND SUPPORT (EX-L&S) REVENUE AND GROSS PROFIT
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
|
$
557.6
|
|
$
557.0
|
|
$
2,015.4
|
|
$
1,979.9
|
L&S
revenue
|
|
144.3
|
|
170.1
|
|
429.1
|
|
468.0
|
Ex-L&S Non-GAAP
revenue
|
|
$
413.3
|
|
$
386.9
|
|
$
1,586.3
|
|
$
1,511.9
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
$
181.2
|
|
$
189.8
|
|
$ 551.3
|
|
$
529.6
|
L&S gross
profit
|
|
112.8
|
|
144.1
|
|
311.3
|
|
360.8
|
Ex-L&S Non-GAAP
gross profit
|
|
$
68.4
|
|
$
45.7
|
|
$ 240.0
|
|
$
168.8
|
|
|
|
|
|
|
|
|
|
Gross profit
percent
|
|
32.5 %
|
|
34.1 %
|
|
27.4 %
|
|
26.7 %
|
Ex-L&S Non-GAAP
gross profit percent
|
|
16.5 %
|
|
11.8 %
|
|
15.1 %
|
|
11.2 %
|
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SOURCE Unisys