TMCnet News
Unisys Announces First-Quarter 2015 Financial ResultsBLUE BELL, Pa., April 23, 2015 /PRNewswire/ -- Unisys Corporation (NYSE: UIS) today reported a first-quarter 2015 net loss of $43.2 million, or 87 cents per diluted share, which included $27.4 million of pension expense. In the first quarter of 2014, the company reported a net loss of $53.5 million, or $1.15 per diluted share, which included $19.3 million of pension expense. Excluding pension expense in both periods, the non-GAAP diluted loss per share in the first quarter of 2015 was 32 cents compared to 74 cents in the first quarter of 2014. First-quarter 2015 revenue declined 5 percent to $721 million from $762 million in the year-ago quarter. First-quarter 2015 revenue grew 1 percent on a constant currency basis. "We were pleased to see revenue growth of 1 percent on a constant currency basis during the first quarter of 2015 and 13 percent growth in our U.S. Federal government business," said Unisys President and CEO Peter Altabef. "While our technology margins increased, our service margins declined. We are taking actions to streamline our business by enhancing our competitiveness and accelerating the pace of innovation. Our focus is on making Unisys an agile leader that can anticipate and rapidly respond to market opportunities globally." In connection with organizational initiatives designed to create a more competitive cost structure and rebalance the company's global skill set to take advantage of growth opportunities, Unisys expects to recognize a pretax restructuring charge currently estimated at approximately $300 million over the next several quarters. The company expects to reduce worldwide headcount by approximately 8 percent. As a result of these actions, the company expects to generate annualized savings of approximately $200 million by the end of 2016. First-Quarter Company and Business Segment Highlights U.S. Federal government revenue in the first quarter of 2015 grew 13 percent versus the year-ago quarter. Public Sector revenue, which includes U.S. state and local and international governments, declined 10 percent. Financial industry revenue also declined by 10 percent. Revenue from Commercial industry clients declined 7 percent. First-quarter 2015 services revenue declined 6 percent from the prior-year quarter. On a constant currency basis, services revenue was flat. First-quarter 2015 services gross profit margin decreased to 14.1 percent from 15.8 percent a year ago while services operating profit (loss) margin declined to (1.3) percent from 1.5 percent a year ago. First-quarter 2015 services orders increased from year-ago levels primarily driven by higher orders for Cloud and Infrastructure Services. Services backlog at March 31, 2015 was $4.5 billion compared to $4.8 billion at December 31, 2014. Services backlog at March 31, 2015 was flat compared to March 31, 2014 and up on a constant currency basis. First-quarter 2015 technology revenue rose 3 percent from the prior-year quarter driven by higher sales of our enterprise software and servers. On a constant currency basis, technology revenue increased by 13 percent. Reflecting the higher enterprise software and server sales, first-quarter 2015 technology gross profit margin rose to 49.6 percent from 41.3 percent in the year-ago quarter and technology operating profit (loss) margin increased to 5.2 percent from (16.4) percent in the year-ago quarter. The company reported an overall first-quarter 2015 gross profit margin of 16.2 percent compared with 17.5 percent in the year-ago quarter. Operating expenses (SG&A and R&D expenses) declined 4 percent from the year-ago period. The company reported a first-quarter 2015 operating loss of $30.0 million compared with an operating loss of $19.9 million in the first quarter of 2014. Pension expense was $8.4 million higher in the first quarter of 2015. The company reported a first-quarter 2015 pretax loss of $27.7 million compared with a pretax loss of $31.7 million in the year-ago quarter. Excluding pension expense in both periods, the company reported a non-GAAP pretax profit(3) of $0.2 million in the first quarter of 2015 compared with a non-GAAP pretax loss of $12.2 million in the first quarter of 2014. Cash Flow and Balance Sheet Highlights At March 31, 2015, the company reported a cash balance of $402 million and total debt of $224 million. Non-GAAP Information Our non-GAAP measures are not intended to be considered in isolation or as substitutes for results determined in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. (See GAAP to non-GAAP reconciliations attached.) (1) Constant currency – The company refers to growth rates at constant currency or adjusting for currency 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 for revenue is calculated by retranslating current and prior period results at a consistent rate. This approach is based on the pricing currency for each country which is typically the functional currency. Generally, when the dollar either strengthens or weakens against other currencies, the growth at constant currency rates will be higher or lower, respectively, than growth reported at actual exchange rates. (2) Non-GAAP diluted earnings/loss per share - Unisys recorded pension expense of $27.4 million and $19.3 million during the first quarters of 2015 and 2014, respectively. In an effort to provide investors with a perspective on the company's earnings without these charges, they are excluded from the non-GAAP diluted earnings/loss per share calculations. (3) Non-GAAP pretax profit/loss - Unisys recorded pension expense of $27.9 million and $19.5 million during the first quarters of 2015 and 2014, respectively. In an effort to provide investors with a perspective on the company's profitability without these charges, they are excluded from the non-GAAP pretax profit/loss calculations. (4) Free cash flow – To better understand the trends in our business, we believe that it is helpful to present free cash flow, which we define as cash flow from operations less capital expenditures. Management believes this measure gives investors an additional perspective on cash flow from operating activities in excess of amounts required for reinvestment. Because of the significance of the company's pension funding obligations, free cash flow before pension funding is also provided. Conference Call About Unisys Forward-Looking Statements RELEASE NO.: 0423/9330 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.
UNISYS CORPORATION SEGMENT RESULTS (Unaudited) (Millions) Total Eliminations Services Technology Three Months Ended March 31, 2015 Customer revenue $721.2 $639.0 $82.2 Intersegment ($6.7) - 6.7 Total revenue $721.2 ($6.7) $639.0 $88.9 Gross profit percent 16.2% 14.1% 49.6% Operating profit (loss) percent (4.2%) (1.3%) 5.2% Three Months Ended March 31, 2014 * Customer revenue $761.7 $681.7 $80.0 Intersegment ($6.1) 0.2 5.9 Total revenue $761.7 ($6.1) $681.9 $85.9 Gross profit percent 17.5% 15.8% 41.3% Operating profit (loss) percent (2.6%) 1.5% (16.4%) * Changed to conform with the 2015 presentation.
UNISYS CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) (Millions) March 31, December 31, 2015 2014 Assets Current assets Cash and cash equivalents $402.0 $494.3 Accounts and notes receivable, net 484.8 619.3 Inventories Parts and finished equipment 29.0 22.2 Work in process and materials 31.3 24.5 Deferred income taxes 16.6 16.4 Prepaid expense and other current assets 142.4 140.6 Total 1,106.1 1,317.3 Properties 1,004.7 1,059.4 Less accumulated depreciation and amortization 837.4 890.7 Properties, net 167.3 168.7 Outsourcing assets, net 160.1 150.9 Marketable software, net 144.5 144.1 Prepaid postretirement assets 21.4 19.9 Deferred income taxes 152.4 154.6 Goodwill 179.6 183.9 Other long-term assets 200.1 209.3 Total $2,131.5 $2,348.7 Liabilities and deficit Current liabilities Current maturities of long-term debt $2.2 $1.8 Accounts payable 230.3 262.5 Deferred revenue 316.6 348.3 Other accrued liabilities 314.2 385.1 Total 863.3 997.7 Long-term debt 221.6 222.2 Long-term postretirement liabilities 2,272.1 2,369.9 Long-term deferred revenue 109.7 119.5 Other long-term liabilities 86.1 91.8 Commitments and contingencies Total deficit (1,421.3) (1,452.4) Total $2,131.5 $2,348.7
UNISYS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Millions) Three Months Ended March 31 2015 2014 Cash flows from operating activities Consolidated net loss ($41.0) ($47.7) Add (deduct) items to reconcile consolidated net loss to net cash (used for) provided by operating activities: Foreign currency transaction loss - 5.8 Employee stock compensation 4.4 7.2 Depreciation and amortization of properties 11.7 12.0 Depreciation and amortization of outsourcing assets 12.7 13.3 Amortization of marketable software 16.3 14.7 Other non-cash operating activities (0.1) (0.1) Disposals of capital assets 1.4 0.3 Gain on sale of business - (0.7) Pension contributions (38.7) (55.5) Pension expense 27.9 19.5 (Increase) decrease in deferred income taxes, net (4.4) 2.8 Decrease in receivables, net 106.8 121.2 (Increase) decrease in inventories (15.1) 3.0 Decrease in accounts payable and other accrued liabilities (106.4) (66.0) Decrease in other liabilities (11.1) (9.6) Increase in other assets (7.7) (0.1) Net cash (used for) provided by operating activities (43.3) 20.1 Cash flows from investing activities Proceeds from investments 1,153.4 1,431.6 Purchases of investments (1,126.7) (1,429.0) Investment in marketable software (16.7) (20.7) Capital additions of properties (13.9) (15.2) Capital additions of outsourcing assets (26.7) (8.7) Other 1.5 0.9 Net cash used for investing activities (29.1) (41.1) Cash flows from financing activities Purchases of common stock - (0.9) Payments of long-term debt (0.3) - Dividends paid on preferred shares - (4.0) Proceeds from exercise of stock options 3.5 2.6 Net cash provided by (used for) financing activities 3.2 (2.3) Effect of exchange rate changes on cash and cash equivalents (23.1) (2.7) Decrease in cash and cash equivalents (92.3) (26.0) Cash and cash equivalents, beginning of period 494.3 639.8 Cash and cash equivalents, end of period $402.0 $613.8
( 1 ) UNISYS CORPORATION RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (Unaudited) (Millions, except per share data) Three Months Ended March 31 2015 2014 GAAP net loss attributable to Unisys Corporation common shareholders ($43.2) ($53.5) Pension expense, net of tax 27.4 19.3 Non-GAAP net loss attributable to Unisys Corporation common shareholders (15.8) (34.2) Add preferred stock dividend 0.0 0.0 Non-GAAP net loss attributable to Unisys Corporation for diluted earnings per share ($15.8) ($34.2) Weighted average shares (thousands) 49,821 46,343 Plus incremental shares from assumed conversion: Employee stock plans 0 0 Preferred stock 0 0 GAAP adjusted weighted average shares 49,821 46,343 Diluted earnings per share GAAP basis GAAP net loss attributable to Unisys Corporation for diluted earnings per share ($43.2) ($53.5) Divided by adjusted weighted average shares 49,821 46,343 GAAP loss per diluted share ($ .87) ($ 1.15) Non-GAAP basis Non-GAAP net loss attributable to Unisys Corporation for diluted earnings per share ($15.8) ($34.2) Divided by Non-GAAP adjusted weighted average shares 49,821 46,343 Non-GAAP loss per diluted share ($ .32) ($ .74)
( 2 ) UNISYS CORPORATION RECONCILIATION OF GAAP TO NON-GAAP (Unaudited) (Millions) FREE CASH FLOW Three Months Ended March 31 2015 2014 Cash (used for) provided by operations ($43.3) $20.1 Additions to marketable software (16.7) (20.7) Additions to properties (13.9) (15.2) Additions to outsourcing assets (26.7) (8.7) Free cash flow (100.6) (24.5) Pension funding 38.7 55.5 Free cash flow before pension funding ($61.9) $31.0
( 3 ) UNISYS CORPORATION RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (Unaudited) (Millions, except per share data) Three Months Ended March 31 2015 2014 GAAP loss before income taxes ($27.7) ($31.7) FAS87 pension charges 27.9 19.5 Non-GAAP income (loss) before income taxes $0.2 ($12.2)
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/unisys-announces-first-quarter-2015-financial-results-300071433.html SOURCE Unisys Corporation |