Unisys Announces 1Q23 Results

BLUE BELL, Pa., May 2, 2023 – Unisys Corporation (NYSE: UIS) today reported financial results for the first quarter ended March 31, 2023.

Unisys announced year-over-year revenue growth and margin expansion as strategic initiatives continue to yield results. In order to best evaluate the progress of our growth initiatives, we isolate our results excluding the L&S portion of Enterprise Computing Solutions (ECS), which can be lumpy based on the timing of license renewals. Ex-L&S revenue grew 1.7%, or 4.6% on a constant currency basis and gross margin expanded 310 bps.

“We are pleased with the strong start to 2023. The first quarter demonstrates our continued focus on achieving operational efficiencies while continuing to invest in the future growth of our Next-Gen Solutions in Modern Workplace, Digital Platforms & Applications, Specialized Services & Next-Gen Compute, and Micro-Market Solutions. We achieved year-over-year growth in TCV signings led by expanding scope with existing clients, as well as 15% sequential growth in our qualified pipeline,” said Unisys Chair and CEO Peter A. Altabef.

Conference Call

Unisys will hold a conference call with the financial community on Wednesday, May 3 at 8 a.m. Eastern Time to discuss the results.

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 replay of the webcast 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 2483053 from two hours after the end of the call until May 10, 2023.

⁽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 revenue.

⁽⁴⁾ Annual Contract Value (ACV) – Represents the revenue expected to be recognized during the first 12 months following the signing of a contract.

⁽⁵⁾ 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 new scope for existing clients and new logo contracts.

⁽⁶⁾ Book-to-bill – Represents total contract value booked divided by revenue in a given period.

⁽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.

Non-GAAP Information

Certain financial information is presented in this release under both a U.S. generally accepted accounting basis (GAAP) and a non-GAAP basis. Non-GAAP financial measures exclude certain items such as postretirement expense 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. The following measures are often provided and utilized by the company’s management, analysts, and investors to enhance comparability of year-over-year results. These measures should not be relied upon as substitutes for, or considered in isolation from, measures calculated in accordance with U.S. GAAP.

⁽⁸⁾ Non-GAAP operating profit – This measure excludes pretax postretirement expense and pretax charges in connection with 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 and 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 cost-reduction activities and other expenses.  The tax amounts related to 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 items.

⁽¹¹⁾ Free cash flow – Represents cash flow from operations less capital expenditures.

⁽¹²⁾ Adjusted free cash flow – Represents free cash flow less cash used for postretirement funding and cost-reduction activities and other payments.

⁽¹³⁾ Excluding License and Support (Ex-L&S) – These measures exclude revenue and gross profit 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 lumpy, and related support services in order to evaluate the company’s business outside of these areas.

About Unisys

Unisys is a global technology solutions company that powers breakthroughs for the world's leading organizations. Our solutions – digital workplace; cloud, applications & infrastructure; enterprise computing; and business process – help our clients challenge the status quo and create new possibilities. To learn how we deliver breakthroughs for our clients, 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 our 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 our future results include, but are not limited to, the following: our ability to grow revenue and expand margin in our Digital Workplace Solutions and Cloud, Applications & Infrastructure Solutions businesses; our ability to maintain our installed base and sell new solutions and related services; our ability to attract and retain experienced personnel in key positions; the potential adverse effects of aggressive competition; 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; the business and financial risk in implementing acquisitions or dispositions; we have significant underfunded pension obligations; cybersecurity incidents could result in incurring significant costs and could harm our business and reputation; our failure to remediate material weaknesses in our disclosure controls and procedures and internal controls over financial reporting or any other material weaknesses in the future could result in material misstatements in our financial statements; our ability to access financing markets; the risks of doing business internationally when a significant portion of our revenue is derived from international operations; the adverse effects of global economic conditions, acts of war, terrorism, natural disasters or the widespread outbreak of infectious diseases; a reduction in our credit rating; a significant disruption in our IT systems could adversely affect our business and reputation; the performance and capabilities of third parties with whom we have commercial relationships; 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; a potential impairment of goodwill or intangible assets; a failure to meet standards or expectations with respect to our environmental, social and governance practices; 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 our future results is contained in our periodic filings with the Securities and Exchange Commission. We assume 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 we may provide from time to time regarding our expected future financial performance is effective only on the date given. We generally will not update, reaffirm or otherwise comment on any such information except as we deem necessary, and then only in a manner that complies with Regulation FD.

Contacts:

###

RELEASE NO.: 0502/9905

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 March 31,
		2023		2022
Revenue
Services		$     403.9		$     392.1
Technology		112.5		54.6
		516.4		446.7
Costs and expenses
Cost of revenue
Services		316.1		321.3
Technology		41.3		38.0
		357.4		359.3
Selling, general and administrative		102.9		104.4
Research and development		6.2		6.5
		466.5		470.2
Operating income (loss)		49.9		(23.5)
Interest expense		7.6		8.4
Other (expense), net		(196.9)		(21.0)
Loss before income taxes		(154.6)		(52.9)
Provision for income taxes		19.9		4.1
Consolidated net loss		(174.5)		(57.0)
Net income attributable to noncontrolling interests		0.9		0.3
Net loss attributable to Unisys Corporation		$    (175.4)		$     (57.3)
Loss per share attributable to Unisys Corporation
Basic		$     (2.58)		$     (0.85)
Diluted		$     (2.58)		$     (0.85)

 

 

 

UNISYS CORPORATION

SEGMENT RESULTS

(Unaudited)

(Millions)

 

 

 

 

 

UNISYS CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Millions)

 

 

UNISYS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Millions)

 

 

 

UNISYS CORPORATION

RECONCILIATIONS OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES

(Unaudited)

(Millions, except per share data)

 

 

 

 

 

 

UNISYS CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP

 (Unaudited)

(Millions)

 

FREE CASH FLOW

 

 

 

 

UNISYS CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP

 (Unaudited)

(Millions)

 

 

EBITDA

 

 

 

 

 

 

UNISYS CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP

 (Unaudited)

(Millions)

 

OPERATING PROFIT (LOSS)

 

 

EXCLUDING LICENSE AND SUPPORT (EX-L&S) REVENUE AND GROSS PROFIT