- Unisys Corporation (NYSE: UIS) has announced a set of first-quarter 2020 contracts with new and existing clients valued at $200 million
Unisys Corporation (NYSE: UIS) has announced a set of first-quarter 2020 contracts with new and existing clients valued at $200 million. For example, Unisys signed a $140 million contract with a major commercial defense contractor – which is a new client for Unisys – to provide comprehensive cross-functional IT services and Unisys Stealth security software to protect data across unclassified and classified IT environments. Plus the services and software will help the client optimize how they deliver services to their business partners.
Unisys is a global information technology company based in Blue Bell, Pennsylvania — which provides IT services, software, and technology. And Unisys offers outsourcing and managed services.
And a large global frozen-food company – also a new client for Unisys – had signed a contract with Unisys for digital workplace services powered by InteliServe. As part of the agreement, Unisys will optimize, modernize, and provide greater transparency into technology operations.
InteliServe is going to enhance the user experience within traditional services such as service desk or field services as well as enable greater productivity and collaboration across business unit applications and processes such as human resources, compliance, and finance.
And Unisys also expanded a contract with the California State University (CSU) for CloudForte and Managed Security Services to support CSU’s hybrid-cloud environment with new CloudForte capabilities to help the university integrate its hybrid cloud information resources to deliver more educational and administrative services across all 23 campuses.
The services are designed for providing a better user experience to over 484,000 students and 52,000 faculty while enhancing operational efficiencies and reducing costs.
“Our top priority during this unprecedented crisis has been the safety and well-being of our associates, clients and partners,” said Eric Hutto, president and chief operating officer of Unisys. “We also maintained our focus on providing the best service and most innovative solutions possible for our clients to help them through their challenges during this time. Our solutions for security, digital workplace and cloud and infrastructure are relevant to our clients at this time.”
In the company’s earnings report, Unisys revealed technology revenue growth of 11.2% year over year, ahead of internal expectations. And it also saw an operating profit margin of 3.9%, relative to 4.5% in the prior-year period due to restructuring charges. The company’s non-GAAP operating profit margin was up 70 basis points year over year to 5.5%, relative to 4.8% in the prior-year period.
The loss per share from continuing operations was $0.85 versus $0.64 in the prior-year period due to higher cost-reduction and other charges in Q1 2020. And non-GAAP diluted earnings per share from continuing operations of $0.01 versus a loss of $0.11 in the prior-year period.
“The world has changed dramatically in a few short weeks, and I am proud of how our company and associates have responded to these unprecedented times. Our Unisys Stealth security offerings, including Unisys Always-On Access powered by Stealth which is a next-generation solution that has advantages over many VPN options, and our InteliServe digital workplace solution and its ability to remotely manage operations, address many client needs arising out of this situation,” said Unisys Chairman and CEO Peter A. Altabef. “We also closed the sale of our U.S. Federal business on March 13, 2020, which significantly strengthened our balance sheet and increased capital structure flexibility.”
Unisys’ first-quarter revenue was $515.4 million versus $554.5 million in the prior-year period down 7.1% year over year (down 5.3% on a constant-currency basis). And non-GAAP adjusted revenue was $514.5 million, relative to $552.5 million in the prior-year period.
The revenue results were slightly ahead of the company’s internal expectations with several technology contracts being renewed sooner than expected, helping offset anticipated declines in the company’s check-processing business. COVID-19 had a negative impact on revenue in March, largely resulting from decreased demand for field services and declines in volume-based contracts.
The first-quarter total company operating profit was $20.1 million versus $25.2 million in the prior-year period. And operating profit margin was 3.9% versus 4.5% in the first quarter of 2019 in both cases due to higher cost-reduction and other charges in the first quarter 2020.
Total company non-GAAP operating profit increased 7.1% year over year to $28.5 million, versus $26.6 million in the prior-year period. And non-GAAP operating profit margin increased 70 basis points year over year to 5.5% versus 4.8% in the first quarter of 2019.
The net loss for the first quarter was $53.2 million versus $32.7 million in the prior-year period, driven by cost-reduction and other charges being $26.7 million higher in the first quarter of 2020, relative to the prior-year period. The loss per share was $0.85 compared to a loss per share of $0.64 in the prior-year period, driven by that same cost-reduction and other charges. And non-GAAP net income for the first quarter was $0.7 million versus a net loss of $5.5 million in the prior-year period. The non-GAAP diluted earnings per share was $0.01 versus a net loss per share of $0.11 in the prior-year period.
Adjusted EBITDA was up 10.4% year over year to $71.4 million, relative to $64.7 million in the prior-year period. And net income margin was (10.3)%, compared to (5.9)% in the prior-year period, driven by the charges noted above. And adjusted EBITDA margin increased 220 basis points in the first quarter to 13.9%, relative to 11.7% in the prior-year period.
First-quarter cash used in operations and free cash flow were impacted by approximately $300 million of voluntary pension contributions to the U.S. pension plans from the proceeds of the sale of the U.S. Federal business. The first-quarter cash used in operations was $377.9 million compared to $70.4 million in the prior-year period. And free cash flow was $(405.6) million, compared to $(128.5) million in the prior-year period.
And adjusted free cash flow was $(68.1) million, versus $(95.9) million in the prior-year period. On March 31, 2020, the company had $789.6 million in cash and cash equivalents.
This does not include an additional $487.3 million in restricted cash that was earmarked for the redemption of the company’s $440 million senior secured notes that took place on April 15, 2020.
Due to macroeconomic uncertainty associated with the COVID-19 crisis, the company is withdrawing its previously-provided full-year 2020 financial guidance.
