Unisys Corp 10-Q for FY2022 Q1

Unisys Corp (UIS)

10-Q 2022-04-27 For: 2022-03-31

Added on April 08, 2026

About this 10-Q

Unisys Corp filed this 10-Q on April 27, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $446.7M; down 12.4% from $509.8M a year earlier
Net loss: $57.3M; compared with a net loss of $157.8M a year earlier
Diluted EPS: -$0.85; compared with -$2.45 a year earlier

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Delaware						38-0387840
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01	UIS	New York Stock Exchange


PART I - FINANCIAL INFORMATION		Page Number
Item 1.	Consolidated Financial Statements (Unaudited)
	Consolidated Statements of Income (Loss)	2
	Consolidated Statements of Comprehensive Income (Loss)	3
	Consolidated Balance Sheets	4
	Consolidated Statements of Cash Flows	5
	Consolidated Statements of Deficit	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27
Item 4.	Controls and Procedures	27
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 6.	Exhibits	29

Exhibit Index		30
Signatures		31


	Three Months Ended March 31,
		2022		2021
Revenue
Services		$	392.1	$	420.4
Technology		54.6		89.4
		446.7		509.8
Costs and expenses
Cost of revenue
Services		321.3		338.7
Technology		38.0		31.9
		359.3		370.6
Selling, general and administrative		104.4		90.0
Research and development		6.5		5.6
		470.2		466.2
Operating (loss) income		(23.5)		43.6
Interest expense		8.4		10.1
Other (expense), net		(21.0)		(182.6)
Loss before income taxes		(52.9)		(149.1)
Provision for income taxes		4.1		8.4
Consolidated net loss		(57.0)		(157.5)
Net income attributable to noncontrolling interests		0.3		0.3
Net loss attributable to Unisys Corporation		$	(57.3)	$	(157.8)


Loss per share attributable to Unisys Corporation



Basic		$	(0.85)	$	(2.45)



Diluted		$	(0.85)	$	(2.45)


	Three Months Ended March 31,
		2022		2021


Consolidated net loss		$	(57.0)	$	(157.5)
Other comprehensive income (loss)
Foreign currency translation		(17.7)		(17.1)
Postretirement adjustments, net of tax of $6.7 in 2022 and $3.1 in 2021		57.3		202.2
Total other comprehensive income		39.6		185.1
Comprehensive (loss) income		(17.4)		27.6
Less comprehensive (loss) income attributable to noncontrolling interests		(0.9)		1.1
Comprehensive (loss) income attributable to Unisys Corporation		$	(16.5)	$	26.5


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	491.4	$	552.9
Accounts receivable, net	369.4		451.7
Contract assets	39.9		42.0
Inventories	13.0		7.6
Prepaid expenses and other current assets	108.3		78.8
Total current assets	1,022.0		1,133.0
Properties	475.4		468.0
Less-accumulated depreciation and amortization	393.3		381.5
Properties, net	82.1		86.5
Outsourcing assets, net	109.8		124.6
Marketable software, net	171.5		176.2
Operating lease right-of-use assets	56.0		62.7
Prepaid postretirement assets	164.1		159.7
Deferred income taxes	126.6		125.3
Goodwill	314.8		315.0
Intangible assets, net	32.5		34.9
Restricted cash	9.5		7.7
Assets held-for-sale	20.0		20.0
Other long-term assets	168.1		173.9
Total assets	$	2,277.0	$	2,419.5
Liabilities and deficit
Current liabilities:
Current maturities of long-term-debt	$	18.2	$	18.2
Accounts payable	172.5		180.2
Deferred revenue	238.9		253.2
Other accrued liabilities	261.1		300.9

Total current liabilities	690.7		752.5
Long-term debt	504.9		511.2
Long-term postretirement liabilities	932.7		976.2
Long-term deferred revenue	142.2		150.7
Long-term operating lease liabilities	39.7		46.1
Other long-term liabilities	46.4		47.2
Commitments and contingencies (see Note 15)
Deficit:
Common stock, shares issued: 2022; 73.1, 2021; 72.5	0.7		0.7
Accumulated deficit	(1,466.3)		(1,409.0)
Treasury stock, shares at cost: 2022; 5.5, 2021; 5.3	(155.7)		(152.2)
Paid-in capital	4,716.6		4,710.9
Accumulated other comprehensive loss	(3,223.3)		(3,264.1)
Total Unisys Corporation stockholders’ deficit	(128.0)		(113.7)
Noncontrolling interests	48.4		49.3
Total deficit	(79.6)		(64.4)
Total liabilities and deficit	$	2,277.0	$	2,419.5


			Unisys Corporation
	Total		Total Unisys Corporation		Common Stock Par Value		Accumu-lated Deficit		Treasury Stock At Cost		Paid-in Capital		Accumu-lated Other Compre-hensive Loss		Non-controlling Interests
Balance at December 31, 2021	$	(64.4)	$	(113.7)	$	0.7	$	(1,409.0)	$	(152.2)	$	4,710.9	$	(3,264.1)	$	49.3
Consolidated net (loss) income	(57.0)		(57.3)				(57.3)								0.3


Stock-based activity	2.2		2.2						(3.5)		5.7
Translation adjustments	(17.7)		(14.9)										(14.9)		(2.8)
Postretirement plans	57.3		55.7										55.7		1.6
Balance at March 31, 2022	$	(79.6)	$	(128.0)	$	0.7	$	(1,466.3)	$	(155.7)	$	4,716.6	$	(3,223.3)	$	48.4



Receivables	$	7.8
Prepaid expenses and other current assets	0.7
Properties and other long-term assets	0.2
Operating lease right-of-use assets	0.2
Accounts payable and accruals	(5.6)

Long-term operating lease liabilities	(0.1)
Intangible assets	18.3
Goodwill	65.5
Total	$	87.0


	Weighted Average Amortization Period in Years	Fair Value

Customer relationships	8.5	17.4
Marketing	4.0	0.9
Total		$	18.3


	Three Months Ended March 31,
		2022		2021
Cost of revenue		$	2.7	$	(1.7)
Selling, general and administrative		(0.7)		6.2
Research and development		(0.1)		1.7
Other (expense), net		1.1		2.3
Total		$	3.0	$	8.5


	Total		U.S.		International
Balance at December 31, 2021	$	16.3	$	5.7	$	10.6

Payments	(3.8)		(1.5)		(2.3)
Changes in estimates	(0.6)		(0.5)		(0.1)
Translation adjustments	(0.3)		—		(0.3)
Balance at March 31, 2022	$	11.6	$	3.7	$	7.9
Expected future utilization on balance at March 31, 2022:
Short-term	$	11.0	$	3.7	$	7.3
Long-term	$	0.6	$	—	$	0.6


	Three Months Ended March 31, 2022						Three Months Ended March 31, 2021
	Total		U.S. Plans		International Plans		Total		U.S. Plans		International Plans
Service cost(i)	$	0.5	$	—	$	0.5	$	1.2	$	—	$	1.2
Interest cost	38.9		28.3		10.6		39.6		29.4		10.2
Expected return on plan assets	(68.4)		(47.5)		(20.9)		(74.1)		(51.4)		(22.7)
Amortization of prior service benefit	(1.3)		(0.6)		(0.7)		(1.3)		(0.6)		(0.7)
Recognized net actuarial loss	40.9		30.7		10.2		46.2		33.2		13.0
Settlement losses	—		—		—		158.0		158.0		—
Net periodic pension expense	$	10.6	$	10.9	$	(0.3)	$	169.6	$	168.6	$	1.0


(i)Service cost is reported in selling, general and administrative expense. All other components of net periodic pension expense are reported in other (expense), net in the consolidated statements of income (loss).


	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities
Consolidated net loss	$	(57.0)	$	(157.5)

Adjustments to reconcile consolidated net loss to net cash used for operating activities:


Foreign currency (gains) losses	(2.2)		2.9
Non-cash interest expense	0.4		0.9
Employee stock compensation	6.6		3.3
Depreciation and amortization of properties	10.4		7.6
Depreciation and amortization of outsourcing assets	18.3		16.1
Amortization of marketable software	15.8		15.5
Amortization of intangible assets	2.4		—
Other non-cash operating activities	0.4		(0.6)
Loss on disposal of capital assets	0.5		0.8
Postretirement contributions	(16.2)		(21.6)
Postretirement expense	10.2		169.0
Deferred income taxes, net	(3.7)		(2.0)
Changes in operating assets and liabilities, excluding the effect of acquisitions:
Receivables, net and contract assets	94.2		48.8
Inventories	(5.4)		3.7
Other assets	(26.4)		(15.2)
Accounts payable and current liabilities	(79.0)		(124.8)
Other liabilities	(2.3)		10.2
Net cash used for operating activities	(33.0)		(42.9)
Cash flows from investing activities
Purchase of businesses, net of cash acquired	(0.3)		—

Proceeds from investments	939.0		1,229.5
Purchases of investments	(941.3)		(1,235.5)
Investment in marketable software	(11.1)		(17.4)
Capital additions of properties	(5.2)		(5.1)
Capital additions of outsourcing assets	(2.4)		(5.0)
Other	(0.4)		(0.4)
Net cash used for investing activities	(21.7)		(33.9)
Cash flows from financing activities
Payments of long-term debt	(7.7)		(91.6)


	Restricted Stock and RSU	Weighted- Average Grant-Date Fair Value
Outstanding at December 31, 2021	2,124	$	22.73
Granted	903	27.02
Vested	(642)	23.16
Forfeited and expired	(24)	26.99
Outstanding at March 31, 2022	2,361	24.20


	Three Months Ended March 31,
	2022			2021
Weighted-average fair value of grant	$	34.14		$	40.02
Risk-free interest rate(i)	1.72		%	0.27		%
Expected volatility(ii)	57.71		%	57.08		%
Expected life of restricted stock units in years(iii)	2.85			2.84
Expected dividend yield	—		%	—		%


(i)Represents the continuously compounded semi-annual zero-coupon U.S. treasury rate commensurate with the remaining performance period.
(ii)Based on historical volatility for the company that is commensurate with the length of the performance period.
(iii)Represents the remaining life of the longest performance period.


(i)Amounts represent shares excluded from the computation of diluted loss per share, as their effect, if included, would have been anti-dilutive for the periods presented.


	March 31, 2022		December 31, 2021
Contract assets - current	$	39.9	$	42.0
Contract assets - long-term(i)	16.8		17.4
Deferred revenue - current	(238.9)		(253.2)
Deferred revenue - long-term	(142.2)		(150.7)


(i)Reported in other long-term assets on the company’s consolidated balance sheets.


	March 31, 2022		December 31, 2021
Balance Sheet Location
Prepaid expenses and other current assets	$	1.5	$	3.6
Other accrued liabilities	8.6		2.1
Total fair value	$	(7.1)	$	1.5


	March 31, 2022				December 31, 2021
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt:
6.875% senior secured notes due November 1, 2027	$	478.4	$	509.2	$	478.1	$	527.0


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Technology (i)	$	10.0	$	2.6	$	7.4
Customer relationships (ii)	27.0		2.7		24.3
Marketing (ii)	0.9		0.1		0.8
Total	$	37.9	$	5.4	$	32.5


	Future Amortization Expense
Remainder of 2022	$	5.9
2023	7.9
2024	5.4
2025	2.6
2026	2.3
Thereafter	8.4
Total	$	32.5


	Three Months Ended March 31,
	2021
Contractual interest coupon	$	0.8
Amortization of debt discount	0.5
Amortization of debt issuance costs	0.1
Total	$	1.4


	Total		Translation Adjustments		Postretirement Plans
Balance at December 31, 2021	$	(3,264.1)	$	(866.2)	$	(2,397.9)
Other comprehensive income (loss) before reclassifications	2.7		(16.0)		18.7
Amounts reclassified from accumulated other comprehensive loss	38.1		1.1		37.0
Current period other comprehensive income (loss)	40.8		(14.9)		55.7
Balance at March 31, 2022	$	(3,223.3)	$	(881.1)	$	(2,342.2)


(i) Reported in other (expense), net in the consolidated statements of income (loss).
(ii)These items are included in net periodic postretirement cost (see Note 5).


	Total Segments		DWS		C&I		ECS
Three Months Ended March 31, 2022
Customer revenue	$	374.5	$	124.8	$	129.1	$	120.6
Intersegment	—		—		—		—
Total revenue	$	374.5	$	124.8	$	129.1	$	120.6
Gross profit	$	85.8	$	16.0	$	7.0	$	62.8

Three Months Ended March 31, 2021
Customer revenue	$	432.9	$	142.9	$	120.7	$	169.3
Intersegment	1.0		—		—		1.0
Total revenue	$	433.9	$	142.9	$	120.7	$	170.3
Gross profit	$	133.8	$	19.1	$	9.9	$	104.8



Exhibit Number			Description

3.1			Restated Certificate of Incorporation of Unisys Corporation (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on April 30, 2010)

3.2			Certificate of Amendment of the Restated Certificate of Incorporation of Unisys Corporation (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on April 28, 2011)

3.3			Certificate of Amendment of the Restated Certificate of Incorporation of Unisys Corporation (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on April 28, 2017)

3.4			Bylaws of Unisys Corporation, as amended through May 10, 2019 (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on May 15, 2019)

31.1			Certification of Peter A. Altabef required by Rule 13a-14(a) or Rule 15d-14(a)

31.2			Certification of Michael M. Thomson required by Rule 13a-14(a) or Rule 15d-14(a)

32.1			Certification of Peter A. Altabef required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

32.2			Certification of Michael M. Thomson required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

101			The following financial information from Unisys Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Statements of Income (Loss), (ii) Consolidated Statements of Comprehensive Income (Loss), (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Deficit, and (vi) Notes to Consolidated Financial Statements

104			Cover page Interactive Data File (the cover page XBRL tags are embedded within the iXBRL (Inline Extensible Business Reporting Language) document)



	UNISYS CORPORATION

Date: April 27, 2022	By:	/s/ Michael M. Thomson
		Michael M. Thomson
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)



			By:			/s/ Erin Mannix
						Erin Mannix
						Vice President and Chief Accounting Officer
						(Principal Accounting Officer)



						/s/ Peter A. Altabef
			Name:			Peter A. Altabef
			Title:			Chair and Chief Executive Officer