Unisys Announces First-Quarter 2012 Financial R...

Unisys Announces First-Quarter 2012 Financial Results

    BLUE BELL, Pennsylvania, April 25, 2012 --

    - Revenue grows 2 percent; Services revenue grows 3 percent
    - Net income of $13.4 million vs. net loss of $40.8 million in 1Q 
      2011
    - Diluted EPS of 30 cents vs. loss of 95 cents in 1Q 2011
    - Non-GAAP(1) diluted EPS of 97 cents compares to non-GAAP(1) loss 
      of 4 cents in 1Q 2011
    - Free cash flow(2) increases to $3 million vs. free cash usage of 
      $15 million 1Q 2011
    - Free cash flow(2) of $71 million before pension funding vs. $7 
      million in 1Q 2011
    - Completed previously announced redemption of $66 million of 
      outstanding senior notes

    Unisys Corporation (NYSE: UIS) today reported first-quarter 2012 
net income of $13.4 million, or 30 cents per diluted share, which 
includes a charge of $7.2 million related to debt reduction and $24.6 
million of pension expense. The results compare with a first-quarter 
2011 net loss of $40.8 million, or a loss of 95 cents per diluted 
share, which included a $31.8 million debt reduction charge and $7.2 
million of pension expense. Excluding debt reduction charges and 
pension expense, non-GAAP diluted earnings per share in the first 
quarter of 2012 was 97 cents compared with a loss of 4 cents in the 
first quarter of 2011. Revenue in the first quarter of 2012 increased 2 
percent to $928 million compared with $911 million in the year-ago 
quarter.

    "We are pleased to report both increased profits and higher revenue 
in the first quarter," said Unisys Chairman and CEO Ed Coleman. "We 
have grown revenue year over year for two of the last three quarters 
despite softness in our U.S. Federal government business. We also 
retired an additional $66 million of debt during the quarter. Since 
September 2010, we have reduced our debt by more than $540 million, or 
nearly two thirds, and cut annualized interest expense by $69 million. 
We are focused on continuing our progress in 2012 as we work toward 
achieving our strategic and financial objectives."

    First-Quarter Company and Business Segment Highlights

    First-quarter 2012 overall revenue grew 2 percent year-over-year 
despite a decline in the company's U.S. Federal business. The company 
reported strong revenue growth in the United States outside the U.S. 
Federal market. Foreign currency fluctuations had a negligible impact 
on revenue in the quarter.

    First-quarter 2012 gross profit margin improved to 24.3 percent 
from 22.8 percent in the year-ago quarter. First-quarter 2012 operating 
profit increased to $64.4 million, or 6.9 percent of revenue, from 
$41.9 million, or 4.6 percent of revenue in the first quarter of 2011.

    First-quarter 2012 services revenue increased 3 percent from the 
prior-year quarter, primarily reflecting growth in systems integration 
revenue. Excluding the U.S. Federal business, services revenue grew 7 
percent compared with the first quarter of 2011. The
company reported a first-quarter 2012 services gross profit margin of 
18.9 percent compared with 18.0 percent a year ago while services 
operating profit margin improved to 5.0 percent from 4.0 percent a year 
ago.

    First-quarter services orders showed double-digit increases in the 
quarter, primarily reflecting order gains for outsourcing and 
infrastructure services. Services backlog at March 31, 2012 was $5.4 
billion, a 6 percent decrease from the first quarter of 2011 and a
1 percent decrease from services backlog at December 31, 2011.

    First-quarter 2012 technology revenue declined 5 percent from the 
prior-year quarter. While revenue declined, technology gross profit 
margin improved to 62.2 percent from 51.1 percent in the year-ago 
quarter and technology operating profit margin increased to 25.6 
percent from 10.9 percent in the year-ago quarter, reflecting a richer 
mix of enterprise software in the current quarter.

    Cash Flow and Balance Sheet Highlights

    Unisys generated $33 million of cash from operations in the first 
quarter of 2012 compared with $28 million in the first quarter of 2011. 
Pension cash funding increased to $68 million from $22 million in the 
first quarter of 2011. Capital expenditures in the first quarter of 
2012 were $30 million compared with $43 million in the year-ago 
quarter. The company generated $3 million of free cash flow(2) in the 
first quarter of 2012 compared with free cash usage of $15 million in 
the first quarter of 2011. In the first quarter of 2012 free cash 
flow(2) was $71 million before pension funding compared with $7 million 
in the year-ago quarter.

    During the quarter Unisys completed its previously announced 
redemption of $66 million of outstanding senior notes. At March 31, 
2012, the company reported total debt of $296 million and a cash 
balance of $655 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 earnings per diluted share and free cash flow.

    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) Non-GAAP earnings per diluted share - As a result of the debt 
reductions, Unisys recorded charges of $7.2 million and $31.8 million 
during the first quarters of 2012 and 2011, respectively. The company 
also recorded pension expense of $24.6 million and $7.2 million during 
the first quarters of 2012 and 2011, 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 earnings per diluted 
share calculations.

    (2) 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 in 2012, 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 via a link on the 
Unisys Investor Web site at http://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 22,500 employees, Unisys serves commercial organizations 
and government agencies throughout the world. For more information, 
visit http://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 drive profitable growth in consulting and systems 
integration; the company's ability to take on, successfully implement 
and grow outsourcing operations; market demand for the company's high-
end enterprise servers and maintenance on those servers; the potential 
adverse effects of aggressive competition in the information services 
and technology marketplace; the company's ability to retain significant 
clients; the company's ability to effectively anticipate and respond to 
volatility and rapid technological change in its industry; the adverse 
effects of global economic conditions; the company's significant 
pension obligations and potential requirements to make significant cash 
contributions to its defined benefit pension plans; the success of the 
company's program to reduce costs, focus its global resources and 
simplify its business structure; 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 risk that breaches of data security could expose the 
company to legal liability and could harm its business and reputation; 
the performance and capabilities of third parties with whom the company 
has commercial relationships; 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; 
the company's ability to use its U.S. Federal net operating loss 
carryforwards and other tax attributes; 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.: 0424/9097

    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
                                              2012      2011
    Revenue
    Services                                 $823.0     $800.3
    Technology                                105.4      110.9
                                              928.4      911.2
    Costs and expenses
    Cost of revenue:
    Services                                  668.6      654.5
    Technology                                 34.0       48.5
                                              702.6      703.0
    Selling, general and administrative       141.4      146.0
    Research and development                   20.0       20.3
                                              864.0      869.3
    Operating profit                           64.4       41.9

    Interest expense                            9.3       25.9
    Other income (expense), net               (13.2)     (23.8)
    Income (loss) before income taxes          41.9       (7.8)

    Provision for income taxes                 22.0       28.2
    Consolidated net income (loss)             19.9      (36.0)
    Net income (loss) attributable to
    noncontrolling interests                    2.5        3.4
    Net income (loss) attributable to Unisys
    Corporation                                17.4      (39.4)

    Preferred stock dividend                    4.0        1.4
    Net income (loss) attributable to Unisys
    Corporation common shareholders           $13.4     ($40.8)

    Earnings (loss) per common share
    attributable to Unisys Corporation
    Basic                                     $ .31     ($ .95)
    Diluted                                   $ .30     ($ .95)

    Shares used in the per share computations
    (thousands):
    Basic                                    43,611     42,836
    Diluted                                  44,063     42,836



                         UNISYS CORPORATION
                          SEGMENT RESULTS
                           (Unaudited)
                           (Millions)

                   Total    Eliminations     Services    Technology
    Three Months
    Ended
    March 31,
    2012
    Customer
    revenue        $928.4                     $823.0          $105.4
    Intersegment             ($32.0)             0.8            31.2
    Total
    revenue        $928.4    ($32.0)          $823.8          $136.6

    Gross profit
    percent          24.3%                      18.9%           62.2%
    Operating
    profit
    percent           6.9%                       5.0%           25.6%

    Three Months
    Ended
    March 31,
    2011
    Customer
    revenue        $911.2                     $800.3          $110.9
    Intersegment             ($21.6)             0.9            20.7
    Total
    revenue        $911.2    ($21.6)          $801.2          $131.6

    Gross profit
    percent          22.8%                      18.0%           51.1%
    Operating
    profit
    percent           4.6%                       4.0%           10.9%



                                UNISYS CORPORATION
                            CONSOLIDATED BALANCE SHEETS
                                    (Unaudited)
                                    (Millions)
                                                         
                                         March 31,         December 31,
                                            2012                2011
    Assets
    Current assets
    Cash and cash
    equivalents                            $654.7             $714.9
    Accounts and notes
    receivable, net                         597.2              673.0
    Inventories
    Parts and finished equipment             36.2               38.1
    Work in process and materials            25.6               26.7
    Deferred income taxes                    21.8               27.1
    Prepaid expense and
    other current assets                    116.6              123.6
    Total                                 1,452.1            1,603.4

    Properties                            1,279.4            1,257.2
    Less accumulated
    depreciation and
    amortization                          1,092.5            1,065.9
    Properties, net                         186.9              191.3
    Outsourcing assets, net                 135.8              137.9
    Marketable software,
    net                                     129.7              129.8
    Prepaid postretirement
    assets                                   46.5               43.9
    Deferred income taxes                   182.6              181.5
    Goodwill                                194.2              192.5
    Other long-term assets                  127.8              131.9
    Total                                $2,455.6           $2,612.2

    Liabilities and deficit
    Current liabilities
    Current maturities of
    long-term debt                           $0.8               $0.9
    Accounts payable                        230.2              241.6
    Deferred revenue                        432.8              448.1
    Other accrued
    liabilities                             357.8              425.5
    Total                                 1,021.6            1,116.1

    Long-term debt                          294.7              358.8
    Long-term
    postretirement
    liabilities                           2,154.4            2,224.0
    Long-term deferred
    revenue                                 124.1              120.3
    Other long-term
    liabilities                             101.2              104.0
    Commitments and
    contingencies
    Total deficit                        (1,240.4)          (1,311.0)
    Total                                $2,455.6           $2,612.2



    
                                UNISYS CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                    (Millions)
                                                    Three Months
                                                       Ended
                                                     March 31
                                                  2012       2011
    Cash flows from operating
    activities
    Consolidated net income
    (loss)                                       $19.9     ($36.0)
    Add (deduct) items to
    reconcile consolidated net
    income (loss) to net cash provided by operating
    activities:
    Loss on debt extinguishment                    7.2       31.8
    Employee stock compensation                    6.1        6.3
    Company stock issued for
    U.S. 401(k) plan                               4.3        3.6
    Depreciation and
    amortization of properties                    14.4       17.1
    Depreciation and
    amortization of outsourcing
    assets                                        13.4       18.7
    Amortization of marketable
    software                                      14.0       17.4
    Disposals of capital assets                    0.3        0.4
    (Gain) loss on sale of
    businesses and assets                        (11.3)       0.3
    Decrease in deferred income
    taxes, net                                     4.8       12.3
    Decrease in receivables, net                  69.5       74.1
    Decrease in inventories                        3.5        8.7
    Decrease in accounts payable
    and other accrued
    liabilities                                  (76.4)    (110.3)
    Decrease in other
    liabilities                                  (69.6)      (6.2)
    Decrease (increase) in other
    assets                                        32.6       (8.8)
    Other                                          0.7       (1.0)
    Net cash provided by
    operating activities                          33.4       28.4

    Cash flows from investing
    activities
    Proceeds from investments                    711.0       84.8
    Purchases of investments                    (711.0)     (83.5)
    Restricted deposits                            1.3        0.2
    Investment in marketable software            (13.9)     (11.4)
    Capital additions of properties               (7.9)     (15.0)
    Capital additions of outsourcing assets       (8.6)     (17.0)
    Net proceeds from sale of businesses 
     and assets                                    2.8       (5.2)
    Net cash used for investing
    activities                                   (26.3)     (47.1)

    Cash flows from financing
    activities
    Proceeds from issuance of preferred stock, net
    of issuance costs                                -      250.4
    Payments of long-term debt                   (71.7)    (239.3)
    Dividends paid to noncontrolling interests    (4.5)      (0.4)
    Dividends paid on preferred shares            (4.0)         -
    Proceeds from exercise of stock options        0.1        1.3
    Net cash (used for) provided
    by financing activities                      (80.1)      12.0

    Effect of exchange rate
    changes on cash and cash
    equivalents                                   12.8       11.5

    (Decrease) increase in cash
    and cash equivalents                         (60.2)       4.8
    Cash and cash equivalents,
    beginning of period                          714.9      828.3
    Cash and cash equivalents,
    end of period                               $654.7     $833.1


    
                                   ( 1 )
                            UNISYS CORPORATION
       RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
                                (Unaudited)
                     (Millions, except per share data)


                                                  Three Months
                                                 Ended March 31
                                             2012               2011
    GAAP net income (loss)
    attributable to Unisys Corporation
    common shareholders                      $13.4            ($40.8)

    Debt reduction charges, net of tax         7.2              31.8
    FAS87 pension charges, net of tax         24.6               7.2

    Non-GAAP net income (loss)
    attributable to Unisys Corporation
    common shareholders                       45.2              (1.8)

    Add preferred stock dividend               4.0               0.0

    Non-GAAP net income (loss)
    attributable to Unisys Corporation
    for diluted earnings per share           $49.2             ($1.8)

    Weighted average shares
    (thousands)                             43,611            42,836

    Plus incremental shares from
    assumed conversion:
    Employee stock plans                       452                 0
    Preferred stock                          6,913                 0

    GAAP Adjusted weighted average
    shares                                  50,976            42,836

    Diluted earnings (loss) per share

    GAAP basis
    GAAP net income (loss)
    attributable to Unisys Corporation
    for diluted earnings per share           $13.4            ($40.8)

    Divided by adjusted weighted
    average shares                          44,063            42,836

    GAAP net income (loss) per diluted
    share                                    $ .30            ($ .95)

    Non-GAAP basis
    Non-GAAP net income (loss)
    attributable to Unisys Corporation
    for diluted earnings per share           $49.2             ($1.8)

    Divided by Non-GAAP adjusted
    weighted average shares                 50,976            42,836

    Non-GAAP net income (loss) per
    diluted share                            $ .97            ($ .04)



                                ( 2 )
                         UNISYS CORPORATION
                 RECONCILIATION OF GAAP TO NON-GAAP
                             (Unaudited)
                             (Millions)
    FREE CASH FLOW
                                                Three Months
                                               Ended March 31
                                           2012              2011
    Cash provided by
    operations                            $33.4             $28.4
    Additions to marketable
    software                              (13.9)            (11.4)
    Additions to properties                (7.9)            (15.0)
    Additions to outsourcing
    assets                                 (8.6)            (17.0)
    Additions to outsourcing
    assets                                 (8.6)            (17.0)
    Free cash flow                         $3.0            ($15.0)
    Pension funding                        68.2              22.2
    Free cash flow before
    pension funding                       $71.2              $7.2


SOURCE Unisys Corporation

    CONTACT: Investor Contact: Niels Christensen, [phone],
[e-mail]; Media Contact: Jim Kerr, [phone],
[e-mail]






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