0000746838-14-000009.txt : 20140422
0000746838-14-000009.hdr.sgml : 20140422
20140422163235
ACCESSION NUMBER: 0000746838-14-000009
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 2
CONFORMED PERIOD OF REPORT: 20140422
ITEM INFORMATION: Results of Operations and Financial Condition
ITEM INFORMATION: Financial Statements and Exhibits
FILED AS OF DATE: 20140422
DATE AS OF CHANGE: 20140422
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: UNISYS CORP
CENTRAL INDEX KEY: 0000746838
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
IRS NUMBER: 380387840
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-08729
FILM NUMBER: 14776593
BUSINESS ADDRESS:
STREET 1: 801 LAKEVIEW DRIVE, SUITE 100
CITY: BLUE BELL
STATE: PA
ZIP: 19422
BUSINESS PHONE: 2159864011
MAIL ADDRESS:
STREET 1: 801 LAKEVIEW DRIVE, SUITE 100
CITY: BLUE BELL
STATE: PA
ZIP: 19422
FORMER COMPANY:
FORMER CONFORMED NAME: BURROUGHS CORP /DE/
DATE OF NAME CHANGE: 19861204
8-K
1
firstqearnings.txt
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) April 22, 2014
_________________________________________________________________________
UNISYS CORPORATION
_________________________________________________________________________
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-8729 38-0387840
_________________________________________________________________________
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
801 Lakeview Drive, Suite 100
Blue Bell, Pennsylvania 19422
_________________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
(215) 986-4011
_________________________________________________________________________
(Registrant's telephone number, including area code)
N/A
_________________________________________________________________________
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
\ \ Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
\ \ Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
\ \ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)
\ \ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On April 22, 2014, Unisys Corporation issued a news release to report
its financial results for the quarter ended March 31, 2014.
The release is furnished as Exhibit 99 to this Current Report.
The information in this Current Report, including the Exhibit attached
hereto shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that section. The information contained herein and in the
accompanying Exhibit shall not be incorporated by reference into any
registration statement or other document filed with the Securities and
Exchange Commission by Unisys Corporation, whether before or after the
date hereof, regardless of any general incorporation language in such
filing, except as shall be expressly set forth by specific reference in
such filing.
Item 9.01. Financial Statements and Exhibits.
(d) The following exhibit is being furnished herewith:
99 News Release, dated April 22, 2014, of Unisys Corporation
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
UNISYS CORPORATION
Date: April 22, 2014 By: /s/ Janet B. Haugen
-------------------
Janet B. Haugen
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
-------------
Exhibit
No.
------
99 News Release, dated April 22, 2014, of Unisys Corporation
EX-99
2
ex99firstq.txt
News Release
Investor Contact:
Niels Christensen, 215-986-6651
Niels.Christensen@unisys.com
Media Contact:
Jim Kerr, 215-986-5795
Jim.Kerr@unisys.com
UNISYS ANNOUNCES FIRST-QUARTER 2014 FINANCIAL RESULTS
* Revenue declines 6 percent; 4 percent on a constant currency(1) basis
* Diluted loss per share of $1.15 vs. a loss of 77 cents in 1Q 2013
* Cash from operations of $20 million vs. $14 million in 1Q 2013
BLUE BELL, Pa., April 22, 2014 - Unisys Corporation (NYSE: UIS) today
reported a first-quarter 2014 net loss of $53.5 million, or a loss of
$1.15 per diluted share, which included $19.3 million of pension expense.
In the first quarter of 2013 the company reported a net loss of $33.9
million, or a loss of 77 cents per diluted share, which included $22.3
million of pension expense. Excluding pension expense in both periods,
the non-GAAP diluted loss per share(2) in the first quarter of 2014 was
74 cents compared with a non-GAAP diluted loss per share of 26 cents in
the first quarter of 2013.
First-quarter 2014 revenue declined 6 percent to $762 million from $810
million in the year-ago quarter. On a constant currency basis, first-
quarter 2014 revenue declined 4 percent.
"Following a strong fourth quarter of 2013, our first-quarter 2014
revenue and margins were impacted by lower sales of technology and IT
services projects, while cash from operations improved over the year ago
quarter," said Unisys Chairman and CEO Ed Coleman. "We look for improved
results through the course of the year, driven in part by anticipated
full-year growth in our technology business. We are confident in our
strategy and are optimistic about the investments we are making in new
products such as our Stealth cybersecurity software, our Forward! by
Unisys fabric-based server platform, and our cloud-based offerings."
FIRST-QUARTER COMPANY AND BUSINESS SEGMENT HIGHLIGHTS
U.S. revenue declined 5 percent in the quarter. U.S. Federal government
revenue grew 2 percent. International revenue declined 7 percent. On a
constant currency basis, international revenue declined 4 percent.
First-quarter 2014 services revenue declined 4 percent from the prior-
year quarter driven by lower outsourcing and infrastructure services
revenue. Reflecting the lower services revenue, first-quarter 2014
services gross profit margin declined to 15.8 percent from 17.4 percent a
year ago while services operating profit margin declined to 1.9 percent
from 3.1 percent a year ago.
First-quarter 2014 services orders decreased from year-ago levels
primarily driven by lower outsourcing orders. Services backlog at March
31, 2014 was $4.5 billion compared to $4.8 billion at December 31, 2013.
First-quarter 2014 technology revenue declined 19 percent from the prior-
year quarter driven by lower sales of ClearPath enterprise software and
servers. Reflecting the lower ClearPath sales, first-quarter 2014
technology gross profit margin declined to 42.5 percent from 45.8 percent
in the year-ago quarter and technology operating profit (loss) margin
declined to (21.2) percent from 0.2 percent in the year-ago quarter.
The company reported an overall first-quarter 2014 gross profit margin of
17.5 percent compared with 19.9 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 2014 operating
loss of $19.9 million compared with an operating profit of $1.6 million
in the first quarter of 2013.
CASH FLOW AND BALANCE SHEET HIGHLIGHTS
Unisys generated $20 million of cash from operations in the first quarter
of 2014 compared to $14 million in the first quarter of 2013. Cash from
operations included pension contributions of $56 million in the first
quarter of 2014, an increase from $27 million in the first quarter of
2013. Capital expenditures in the first quarter of 2014 were $45 million
compared with $26 million in the year-ago quarter. After capital
expenditures, the company used $25 million of free cash(3) in the first
quarter of 2014 compared with free cash usage of $12 million in the first
quarter of 2013. Free cash flow before pension contributions increased to
$31 million in the first quarter of 2014 from $15 million in the year-ago
quarter.
At March 31, 2014, the company reported a cash balance of $614 million
and total debt of $210 million.
NON-GAAP INFORMATION
Unisys reports its results in accordance with Generally Accepted
Accounting Principles (GAAP) in the United States. However, in an effort
to provide investors with additional perspective regarding the company's
results as determined by GAAP, the company also discusses, in its
earnings press release and/or earnings presentation materials, non-GAAP
information which management believes provides useful information to
investors. Our management uses supplemental non-GAAP financial measures
internally to understand, manage and evaluate our business and assess
operational alternatives. These non-GAAP measures may include non-GAAP
diluted earnings per share, free cash flow, free cash flow before pension
contributions, and constant currency.
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 $19.3 million and $22.3 million during the first quarters of
2014 and 2013, 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) 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
Unisys will hold a conference call today at 5:30 p.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 Web site
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.
ABOUT UNISYS
Unisys is a worldwide information technology company. We provide a
portfolio of IT services, software, and technology that solves critical
problems for clients. We specialize in helping clients secure their
operations, increase the efficiency and utilization of their data
centers, enhance support to their end users and constituents, and
modernize their enterprise applications. To provide these services and
solutions, we bring together offerings and capabilities in outsourcing
services, systems integration and consulting services, infrastructure
services, maintenance services, and high-end server technology. With
approximately 23,000 employees, Unisys serves commercial organizations
and government agencies throughout the world. For more information, 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, 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. Risks and uncertainties that could affect
the company's future results include the company's ability to effectively
anticipate and respond to volatility and rapid technological change in
its industry; the company's ability to drive profitable growth in
consulting and systems integration; the company's ability to profitably
grow its outsourcing business; the company's ability to maintain and grow
its technology business; the potential adverse effects of aggressive
competition in the information services and technology marketplace; the
company's ability to retain significant clients; the risks that the
company's contracts may not be as profitable as expected or provide the
expected level of revenues and that contracts with U.S. governmental
agencies may subject it to audits, criminal penalties, sanctions and
other expenses and fines; the risk that the company may face damage to
its reputation or legal liability if its clients are not satisfied with
its services or products; the performance and capabilities of third
parties with whom the company has commercial relationships; the company's
ability to attract, motivate and retain experienced and knowledgeable
personnel in key positions; the company's significant pension obligations
and potential requirements to make significant cash contributions to its
defined benefit pension plans; the company's ability to continue to
simplify its operations and provide services more cost efficiently; the
adverse effects of global economic conditions; the risk that breaches of
data security could expose the company to legal liability and could harm
its business and reputation; the risks of doing business internationally
when more than half of the company's revenue is derived from
international operations; the company's ability to access capital and
credit markets to address its liquidity needs; the potential for
intellectual property infringement claims to be asserted against the
company or its clients; the possibility that pending litigation could
affect the company's results of operations or cash flow; the business and
financial risk in implementing future dispositions or acquisitions; and
the company's consideration of all available information following the
end of the quarter and before the filing of the Form 10-Q 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.: 0422/9244
Unisys is a registered trademark of Unisys Corporation. All other brands
and products referenced herein are acknowledged to be trademarks or
registered trademarks of their respective holders.
UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Millions, except per share data)
Three Months
Ended March 31
-------------------
2014 2013
-------- --------
Revenue
Services $690.9 $723.0
Technology 70.8 86.9
-------- --------
761.7 809.9
Costs and expenses
Cost of revenue:
Services 592.2 602.8
Technology 36.5 46.3
-------- --------
628.7 649.1
Selling, general and
administrative 138.5 142.2
Research and development 14.4 17.0
-------- --------
781.6 808.3
-------- --------
Operating profit (loss) (19.9) 1.6
Interest expense 2.0 2.7
Other income (expense), net (9.8) (4.9)
-------- --------
Loss before income taxes (31.7) (6.0)
Provision for income taxes 16.0 21.4
-------- --------
Consolidated net loss (47.7) (27.4)
Net income attributable
to noncontrolling interests 3.1 2.5
-------- --------
Net loss attributable
to Unisys Corporation (50.8) (29.9)
Preferred stock dividend 2.7 4.0
-------- --------
Net loss attributable
to Unisys Corporation
common shareholders ($53.5) ($33.9)
======== ========
Loss per common share attributable
to Unisys Corporation
Basic ($ 1.15) ($ .77)
======== ========
Diluted ($ 1.15) ($ .77)
======== ========
Shares used in the per share
computations (thousands):
Basic 46,343 44,054
Diluted 46,343 44,054
UNISYS CORPORATION
SEGMENT RESULTS
(Unaudited)
(Millions)
Elimi-
Total nations Services Technology
-------- -------- -------- ----------
Three Months Ended
March 31, 2014
------------------
Customer revenue $761.7 $690.9 $70.8
Intersegment ($9.6) 0.2 9.4
-------- -------- -------- --------
Total revenue $761.7 ($9.6) $691.1 $80.2
======== ======== ======== ========
Gross profit percent 17.5% 15.8% 42.5%
======== ======== ========
Operating profit
(loss) percent (2.6%) 1.9% (21.2%)
======== ======== ========
Three Months Ended
March 31, 2013
------------------
Customer revenue $809.9 $723.0 $86.9
Intersegment ($17.3) 0.5 16.8
-------- -------- -------- --------
Total revenue $809.9 ($17.3) $723.5 $103.7
======== ======== ======== ========
Gross profit percent 19.9% 17.4% 45.8%
======== ======== ========
Operating profit
percent 0.2% 3.1% 0.2%
======== ======== ========
UNISYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Millions)
March 31, December 31,
2014 2013
---------- ----------
Assets
Current assets
Cash and cash equivalents $613.8 $639.8
Accounts and notes receivable, net 564.9 683.1
Inventories
Parts and finished equipment 29.2 32.8
Work in process and materials 23.0 22.3
Deferred income taxes 19.1 24.1
Prepaid expense and other
current assets 139.4 138.7
---------- ----------
Total 1,389.4 1,540.8
---------- ----------
Properties 1,117.3 1,095.5
Less accumulated depreciation
and amortization 939.6 920.8
---------- ----------
Properties, net 177.7 174.7
---------- ----------
Outsourcing assets, net 110.8 115.5
Marketable software, net 135.1 129.1
Prepaid postretirement assets 106.5 83.7
Deferred income taxes 125.7 112.3
Goodwill 189.7 188.7
Other long-term assets 164.3 165.2
---------- ----------
Total $2,399.2 $2,510.0
========== ==========
Liabilities and deficit
Current liabilities
Accounts payable $221.4 $246.7
Deferred revenue 407.2 402.4
Other accrued liabilities 339.4 375.7
---------- ----------
Total 968.0 1,024.8
---------- ----------
Long-term debt 210.0 210.0
Long-term postretirement liabilities 1,648.1 1,697.2
Long-term deferred revenue 119.7 122.7
Other long-term liabilities 113.0 119.2
Commitments and contingencies
Total deficit (659.6) (663.9)
---------- ----------
Total $2,399.2 $2,510.0
========== ==========
UNISYS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(Millions)
Three Months Ended
March 31
-------------------
2014 2013 *
------- -------
Cash flows from operating activities
Consolidated net loss ($47.7) ($27.4)
Add (deduct) items to reconcile consolidated net
loss to net cash provided by operating activities:
Foreign currency transaction loss 5.8 6.5
Employee stock compensation 7.2 5.9
Depreciation and amortization of properties 12.0 11.9
Depreciation and amortization of
outsourcing assets 13.3 12.8
Amortization of marketable software 14.7 15.5
Disposals of capital assets 0.3 0.1
Gain on sale of business (0.7) -
Pension contributions (55.5) (26.6)
Pension expense 19.5 23.2
Decrease in deferred income taxes, net 2.8 11.7
Decrease in receivables, net 121.2 69.5
Decrease (increase) in inventories 3.0 (0.8)
Decrease in accounts payable
and other accrued liabilities (66.0) (76.9)
Decrease in other liabilities (9.6) (4.6)
Increase in other assets (0.1) (6.6)
Other (0.1) (0.1)
------- -------
Net cash provided by operating activities 20.1 14.1
------- -------
Cash flows from investing activities
Proceeds from investments 1,431.6 1,224.8
Purchases of investments (1,429.0) (1,223.7)
Investment in marketable software (20.7) (14.8)
Capital additions of properties (15.2) (3.6)
Capital additions of outsourcing assets (8.7) (7.5)
Other 0.9 0.2
------- -------
Net cash used for investing activities (41.1) (24.6)
------- -------
Cash flows from financing activities
Purchases of common stock (.9) -
Dividends paid on preferred shares (4.0) (4.0)
Proceeds from exercise of stock options 2.6 0.5
Net proceeds from short-term borrowings - 0.4
------- -------
Net cash used for financing activities (2.3) (3.1)
------- -------
Effect of exchange rate changes on cash
and cash equivalents (2.7) (13.4)
------- -------
Decrease in cash and cash equivalents (26.0) (27.0)
Cash and cash equivalents, beginning of
period 639.8 655.6
------- -------
Cash and cash equivalents, end of period $613.8 $628.6
======= =======
*Certain components of net cash provided by operating
activities were changed to present pension expense
separately, consistent with the 2014 presentation.
(1)
UNISYS CORPORATION
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited)
(Millions, except per share data)
Three Months
Ended March 31
------------------
2014 2013
-------- --------
GAAP net loss
attributable to Unisys Corporation
common shareholders ($53.5) ($33.9)
FAS87 pension charges, net of tax 19.3 22.3
-------- --------
Non-GAAP net loss
attributable to Unisys Corporation
common shareholders (34.2) (11.6)
Add preferred stock dividend 0.0 0.0
-------- --------
Non-GAAP net loss
attributable to Unisys
Corporation for diluted
earnings per share ($34.2) ($11.6)
======== ========
Weighted average
shares (thousands) 46,343 44,054
Plus incremental shares from assumed conversion:
Employee stock plans 0 0
Preferred stock 0 0
-------- --------
GAAP adjusted weighted
average shares 46,343 44,054
======== ========
Diluted earnings (loss) per share
GAAP basis
GAAP net loss
attributable to Unisys
Corporation for diluted
earnings per share ($53.5) ($33.9)
Divided by adjusted weighted
average shares 46,343 44,054
GAAP net loss
per diluted share ($ 1.15) ($ .77)
======== ========
Non-GAAP basis
Non-GAAP net loss
attributable to Unisys
Corporation for diluted
earnings per share ($34.2) ($11.6)
Divided by Non-GAAP adjusted
weighted average shares 46,343 44,054
Non-GAAP net loss
per diluted share ($ .74) ($ .26)
======== ========
(2)
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
FREE CASH FLOW
--------------
Three Months
Ended March 31
-----------------
2014 2013
-------- --------
Cash provided by operations $20.1 $14.1
Additions to marketable
software (20.7) (14.8)
Additions to properties (15.2) (3.6)
Additions to outsourcing
assets (8.7) (7.5)
-------- --------
Free Cash Flow (24.5) (11.8)
Pension funding 55.5 26.6
-------- --------
Free cash flow before
pension funding $31.0 $14.8
======== ========