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) October 30, 2008
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UNISYS CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-8729 38-0387840
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(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
Unisys Way,
Blue Bell, Pennsylvania 19424
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(Address of Principal Executive Offices) (Zip Code)
(215) 986-4011
_______________________________________________________________________________
(Registrant's telephone number, including area code)
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 (see General Instruction A.2. below):
\ \ 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 October 30, 2008, Unisys Corporation issued a news release to
report its financial results for the quarter ended September 30, 2008. 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.
(c) The following exhibit is being furnished herewith:
99 News Release, dated October 30, 2008, of Unisys Corporation
SIGNATURE
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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: October 30, 2008 By: /s/ Janet B. Haugen
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Janet B. Haugen
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
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Exhibit
No.
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99 News Release, dated October 30, 2008, of Unisys Corporation.
News Release Investor Contact: Jack McHale, 215-986-6050 Jack.McHale@unisys.com Media Contacts: Jim Kerr, 215-986-5795 Jim.Kerr@unisys.com Gail Ferrari Marold, 919-302-1620 Gail.Ferrari@unisys.com Unisys Announces Third-Quarter 2008 Financial Results BLUE BELL, Pa., October 30, 2008 - Unisys Corporation (NYSE: UIS) today reported a net loss of $34.7 million, or 10 cents a share, on revenue of $1.31 billion for the third quarter of 2008. In the year-ago quarter, the company reported a net loss of $31.0 million, or 9 cents a share, on revenue of $1.39 billion. The third-quarter 2008 results include $3.7 million of pretax retirement-related income compared with $22.8 million of pretax retirement- related expense in the third quarter of 2007. Foreign currency exchange rates had an approximately 2 percentage-point favorable impact on revenue in the current quarter. "We saw an impact on third-quarter demand from economic uncertainties in our key commercial markets, particularly in financial services," said Unisys Chief Financial Officer Janet Haugen. "Clients reacted to tight credit conditions by reducing IT spending. We also saw a slowdown in our federal business due to slower government spending. However, we saw growth in our non-federal public sector business and strong sales of our ClearPath family of enterprise servers. We also generated free cash flow in the quarter - a key focus for the company. But we expect the environment to remain tough and we will reduce spending as we work through this challenging economic period." Unisys said the company continues to evaluate actions to unlock value in the business and drive shareholder value. Ed Coleman, who joined Unisys as chairman and CEO on October 7, is in the process of reviewing the company's strategy, businesses and operations with the goal of building on Unisys strengths and creating a profitable, growing market leader in targeted areas of the IT industry. "Although I've just recently joined Unisys, I believe there is significant unrealized value in this company," Coleman said. "In speaking with our employees, I am extremely impressed with their skills, dedication, and commitment to clients. As I speak with clients and other stakeholders, I'm convinced that Unisys has tremendous assets to build on, including a great client base and strong capabilities in key segments of the IT industry. We need to better concentrate those assets and drive profitable growth by providing superior client service and solutions. That is my focus and priority. I look forward to working with the Unisys team to realize the potential of this company for the benefit of all stakeholders." Revenue in the United States declined 8 percent in the quarter to $560 million. Revenue in international markets declined 4 percent to $752 million. On a constant currency basis, international revenue declined 9 percent in the quarter. The company reported an overall gross profit margin of 22.2 percent and operating profit margin of 2.9 percent in the third quarter of 2008. These compared to a gross margin of 22.2 percent and operating profit margin of 3.1 percent in the third quarter of 2007. THIRD-QUARTER BUSINESS SEGMENT RESULTS Customer revenue in the company's services segment declined 5 percent in the third quarter of 2008 compared with the year-ago period. Gross profit margin in the services business was 17.6 percent compared with 17.7 percent a year ago while services operating margin declined to 3.1 percent compared with 3.6 percent a year ago. Services orders showed double-digit declines in the third quarter. Services order backlog at September 30, 2008 was $6.50 billion, down 9 percent from $7.17 billion at June 30, 2008, primarily reflecting changes in foreign currency rates. Customer revenue in the company's technology segment declined 9 percent from the third quarter of 2007. Excluding $18.8 million of quarterly royalty revenue in the year-ago period from a recently ended intellectual property agreement with Nihon Unisys Limited (NUL), technology customer revenue grew about 2 percent in the quarter. Double-digit growth in ClearPath mainframe revenue offset revenue declines in specialized technology. Gross profit margin in the technology business increased to 47.5 percent compared with 44.6 percent a year ago, while technology operating margin increased to 11.0 percent compared with 4.0 percent in the third quarter of 2007. CASH FLOW AND BALANCE SHEET HIGHLIGHTS Unisys generated $114 million of cash from operations in the third quarter of 2008 compared with $7 million of cash flow from operations in the year-ago quarter. The company used approximately $6 million of cash in the third quarter of 2008 for restructuring payments compared to approximately $37 million in the year-ago period. Capital expenditures in the third quarter of 2008 were $78 million compared to $71 million in the year-ago quarter. After deducting for capital expenditures, Unisys generated $36 million of free cash in the quarter compared with free cash usage of $64 million in the third quarter of 2007. CONFERENCE CALL Unisys will hold a conference call today at 8:15 a.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 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 services and solutions company. We provide consulting, systems integration, outsourcing and infrastructure services, combined with powerful enterprise server technology. We specialise in helping clients use information to create efficient, secure business operations that allow them to achieve their business goals. Our consultants and industry experts work with clients to understand their business challenges and create greater visibility into critical linkages throughout their operations. 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 general economic and business conditions; the company's ability to successfully implement its repositioning strategy; the effects of aggressive competition in the information services and technology markets on the company's revenues, pricing and margins and on the competitiveness of its product and services offerings; the level of demand for the company's products and services and the company's ability to anticipate and respond to changes in technology and customer preferences; the company's ability to retain significant clients; the company's ability to grow outsourcing and its ability to effectively and timely complete the related solutions implementations, client transitions to the new environment and work force and facilities rationalizations; the company's ability to continue to effectively address its challenging outsourcing operations through negotiations or operationally and to fully recover the associated outsourcing assets; the company's ability to drive profitable growth in consulting and systems integration; the level of demand for the company's high-end enterprise servers and maintenance on those servers; the risk 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 be subject 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 risks of doing business internationally; the potential business and financial risk in implementing future acquisitions or dispositions; the potential for infringement claims to be asserted against the company or its clients and the possibility that pending litigation could affect the company's results of operations or cash flow. Additional discussion of these and other factors that could affect Unisys future results is contained in its periodic filings with the Securities and Exchange Commission. Unisys assumes no obligation to update any forward-looking statements. ### RELEASE NO.: 0723/8899 http://www.unisys.com/about__unisys/news_a_events/07238899.htm 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 Nine Months Ended September 30 Ended September 30 ------------------ ------------------ 2008 2007 2008 2007 -------- -------- -------- -------- Revenue Services $1,152.1 $1,217.6 $3,486.2 $3,579.1 Technology 160.3 175.5 467.5 537.7 -------- -------- -------- -------- 1,312.4 1,393.1 3,953.7 4,116.8 Costs and expenses Cost of revenue: Services 937.6 994.5 2,814.2 2,980.6 Technology 82.8 89.5 250.5 270.3 -------- -------- -------- -------- 1,020.4 1,084.0 3,064.7 3,250.9 Selling, general and administrative 218.4 225.8 701.9 717.8 Research and development 35.7 39.7 98.6 131.6 -------- -------- -------- -------- 1,274.5 1,349.5 3,865.2 4,100.3 -------- -------- -------- -------- Operating profit 37.9 43.6 88.5 16.5 Interest expense 21.5 18.5 64.3 56.1 Other income (expense), net (6.1) (19.3) (23.9) (2.5) -------- -------- -------- -------- Income (loss) before income taxes 10.3 5.8 0.3 (42.1) Provision for income taxes 45.0 36.8 72.4 50.8 -------- -------- -------- -------- Net loss ($34.7) ($31.0) ($72.1) ($92.9) ======== ======== ======== ======== Loss per share Basic ($ .10) ($ .09) ($ .20) ($ .27) ======== ======== ======== ======== Diluted ($ .10) ($ .09) ($ .20) ($ .27) ======== ======== ======== ======== Shares used in the per share computations (thousands): Basic 360,944 350,765 357,969 348,715 ======== ======== ======== ======== Diluted 360,944 350,765 357,969 348,715 ======== ======== ======== ========
UNISYS CORPORATION SEGMENT RESULTS (Unaudited) (Millions) Elimi- Total nations Services* Technology* -------- -------- -------- ---------- Three Months Ended September 30, 2008 - ------------------ Customer revenue $1,312.4 $1,152.1 $160.3 Intersegment ($67.5) 4.0 63.5 -------- -------- -------- -------- Total revenue $1,312.4 ($67.5) $1,156.1 $223.8 ======== ======== ======== ======== Gross profit percent 22.2% 17.6% 47.5% ======== ======== ======== Operating profit percent 2.9% 3.1% 11.0% ======== ======== ======== Three Months Ended September 30, 2007 - ------------------ Customer revenue $1,393.1 $1,217.6 $175.5 Intersegment ($61.2) 3.4 57.8 -------- -------- -------- -------- Total revenue $1,393.1 ($61.2) $1,221.0 $233.3 ======== ======== ======== ======== Gross profit percent 22.2% 17.7% 44.6% ======== ======== ======== Operating profit Percent 3.1% 3.6% 4.0% ======== ======== ======== Nine Months Ended September 30, 2008 - ------------------ Customer revenue $3,953.7 $3,486.2 $467.5 Intersegment ($162.2) 9.4 152.8 -------- -------- -------- -------- Total revenue $3,953.7 ($162.2) $3,495.6 $620.3 ======== ======== ======== ======== Gross profit percent 22.5% 18.4% 43.4% ======== ======== ======== Operating profit Percent 2.2% 2.9% 3.1% ======== ======== ======== Nine Months Ended September 30, 2007 - ------------------ Customer revenue $4,116.8 $3,579.1 $537.7 Intersegment ($148.7) 10.9 137.8 -------- -------- -------- -------- Total revenue $4,116.8 ($148.7) $3,590.0 $675.5 ======== ======== ======== ======== Gross profit percent 21.0% 16.7% 43.7% ======== ======== ======== Operating profit Percent 0.4% 1.7% 2.4% ======== ======== ======== * Results exclude cost reduction actions
UNISYS CORPORATION CONSOLIDATED BALANCE SHEETS (Millions) September 30, 2008 December 31, (Unaudited) 2007 ---------- ---------- Assets Current assets Cash and cash equivalents $493.8 $830.2 Accounts and notes receivable, net 853.3 1,059.2 Inventories Parts and finished equipment 78.5 91.9 Work in process and materials 72.8 79.2 Deferred income taxes 18.0 18.0 Prepaid expense and other current assets 145.6 133.7 ---------- ---------- Total 1,662.0 2,212.2 ---------- ---------- Properties 1,307.8 1,336.9 Less accumulated depreciation and amortization 1,013.2 1,004.7 ---------- ---------- Properties, net 294.6 332.2 ---------- ---------- Outsourcing assets, net 348.9 409.4 Marketable software, net 244.2 268.8 Prepaid postretirement assets 603.8 497.0 Deferred income taxes 93.8 93.8 Goodwill 195.9 200.6 Other long-term assets 120.2 123.1 ---------- ---------- Total $3,563.4 $4,137.1 ========== ========== Liabilities and stockholders' equity Current liabilities Notes payable $0.0 $0.1 Current maturities of long-term debt 2.2 204.3 Accounts payable 337.5 419.6 Other accrued liabilities 1,092.1 1,272.0 ---------- ---------- Total 1,431.8 1,896.0 ---------- ---------- Long-term debt 1,059.7 1,058.3 Long-term postretirement liabilities 370.3 420.7 Other long-term liabilities 321.5 395.5 Stockholders' equity Common stock 3.6 3.6 Accumulated deficit (2,538.0) (2,465.9) Other capital 4,045.9 4,011.8 Accumulated other comprehensive loss (1,131.4) (1,182.9) ---------- ---------- Stockholders' equity 380.1 366.6 ---------- ---------- Total $3,563.4 $4,137.1 ========== ==========
UNISYS CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (Millions) Nine Months Ended September 30 -------------------- 2008 2007 -------- -------- Cash flows from operating activities Net loss ($72.1) ($92.9) Add (deduct) items to reconcile net loss to net cash provided by (used for) operating activities: Employee stock compensation expense (.2) 8.6 Company stock issued for U.S. 401(k) plan 34.2 34.3 Depreciation and amortization of properties 80.4 83.9 Depreciation and amortization of outsourcing assets 126.0 102.4 Amortization of marketable software 90.0 90.1 Disposals of capital assets 8.6 3.8 Gain on sale of assets (23.4) Decrease in deferred income taxes, net 8.9 Decrease in receivables, net 175.9 111.7 Decease (increase) in inventories 16.7 (15.6) Decrease in accounts payable and other accrued liabilities (215.9) (286.8) Decrease in other liabilities (27.9) (68.8) Increase in other assets (108.7) (28.7) Other 9.4 (1.7) ------- ------- Net cash provided by (used for) operating activities 116.4 (74.2) ------- ------- Cash flows from investing activities Proceeds from investments 4,838.1 5,785.7 Purchases of investments (4,847.9) (5,793.4) Investment in marketable software (65.9) (73.0) Capital additions of properties (51.8) (56.4) Capital additions of outsourcing assets (96.6) (108.4) Purchases of businesses (2.3) (2.0) Proceeds from sale of businesses 28.0 ------- ------- Net cash used for investing activities (226.4) (219.5) ------- ------- Cash flows from financing activities Net reduction in short-term borrowings (.1) (1.1) Minority shareholder dividends (5.8) Proceeds from exercise of stock options 12.3 Payments of long-term debt (200.0) Financing fees (.8) ------- ------- Net cash (used for) provided by financing activities (200.9) 5.4 ------- ------- Effect of exchange rate changes on cash and cash equivalents (25.5) 17.5 ------- ------- Decrease in cash and cash equivalents (336.4) (270.8) Cash and cash equivalents, beginning of period 830.2 719.3 ------- ------- Cash and cash equivalents, end of period $493.8 $448.5 ======= =======