Unisys(UIS)2025-02-21 21:32Financial Performance - The net loss attributable to Unisys Corporation in 2024 was $193.4 million, or $2.79 per diluted share, compared to a net loss of $430.7 million, or $6.31 per diluted share in 2023, reflecting a significant reduction in losses [181]. - Revenue for 2024 was $2.01 billion, a slight decrease of 0.3% from $2.02 billion in 2023, with U.S. operations revenue declining by 2.8% to $864.1 million [164][165]. - Digital Workplace Solutions (DWS) revenue decreased by 4.1% to $523.5 million in 2024, primarily due to lower volume with existing clients [184]. - Cloud, Applications & Infrastructure Solutions (CA&I) revenue was $526.9 million in 2024, a decrease of 0.8% from 2023, while gross profit margin improved to 16.5% [185]. - Enterprise Computing Solutions (ECS) revenue increased by 0.5% to $651.3 million in 2024, but gross profit margin decreased to 60.2% due to a higher proportion of lower-margin hardware revenue [186]. - Gross profit for 2024 was $585.9 million, with a gross profit margin of 29.2%, an increase from $551.3 million and 27.4% in 2023, driven by delivery modernization and labor cost savings [169]. Cost and Expenses - The company recognized cost-reduction charges of $20.6 million in 2024, compared to $9.3 million in 2023, with workforce reduction charges primarily related to severance costs [166][167]. - Pension expense decreased significantly to $182.8 million in 2024 from $391.3 million in 2023, reflecting lower settlement losses [174]. - The provision for income taxes in 2024 was $117.9 million, up from $79.3 million in 2023, influenced by a new tax provision for certain foreign subsidiaries [176]. Cash Flow and Liquidity - Cash and cash equivalents at December 31, 2024, were $376.5 million, a slight decrease from $387.7 million at the end of 2023 [189]. - Cash provided by operating activities increased to $135.1 million in 2024 from $74.2 million in 2023, primarily due to lower international pension contributions and favorable legal settlements [191]. - Cash used for investing activities rose to $97.4 million in 2024 from $69.6 million in 2023, with capital additions of properties at $16.0 million and investments in marketable software at $47.5 million [192]. - Cash used for financing activities was $18.1 million in 2024, slightly up from $17.3 million in 2023, including a $192 million group annuity contract purchase resulting in a pre-tax settlement loss of $130.1 million [193]. Debt and Obligations - Total debt decreased to $493.2 million as of December 31, 2024, from $504.2 million in 2023 [199]. - The company had operating lease liabilities of $43.9 million and finance lease liabilities of $2.8 million as of December 31, 2024 [200]. - The Amended and Restated ABL Credit Facility was amended to extend maturity to October 29, 2027, with a reduced aggregate loan limit of $125 million [202]. - At December 31, 2024, the company had outstanding standby letters of credit and surety bonds totaling approximately $194 million related to performance and payment guarantees [210]. Pension Plans - The company has reduced its global defined benefit pension obligations by approximately $2.2 billion since December 2020, including $1.5 billion in the U.S. [196]. - The company estimates future cash contributions to its defined benefit pension plans of approximately $92 million in 2025 and $120 million in 2026, with a total of approximately $750 million from 2027 through 2034 [198]. - As of December 31, 2024, the discount rate for U.S. defined benefit pension plans was 6.09%, an increase of 39 basis points from the previous year, while the non-U.S. rate was 5.10%, up 86 basis points [225]. - The calculated value of U.S. qualified defined benefit pension plan assets was $1.61 billion, with a fair value of $1.38 billion as of December 31, 2024 [226]. - For the year ended December 31, 2024, the company recognized consolidated pension expense of $182.8 million, down from $391.3 million in 2023, and expects approximately $87.0 million for 2025 [229]. - The estimated unrecognized loss for U.S. qualified defined benefit pension plans was approximately $1.00 billion, while for non-U.S. plans it was about $490 million as of December 31, 2024 [228]. Impairment and Fair Value - A goodwill impairment charge of $39.1 million was recognized for the DWS reporting unit due to a triggering event identified in the third quarter of 2024 [237]. - The fair value of the DWS reporting unit equaled its carrying value as of December 31, 2024, with no additional impairment charge recognized for other reporting units [238]. - The company had outstanding $481.6 million of 6.875% senior secured notes due 2027, with a fair value of $471.3 million as of December 31, 2024 [243]. Foreign Exchange and Interest Rate Risk - The company is exposed to foreign currency exchange rate risks, primarily benefiting from a weaker dollar against currencies like the Australian dollar and euro [244]. - A hypothetical 10% adverse movement in foreign currency exchange rates would have reduced the estimated fair value of derivative financial instruments by approximately $49 million for both 2024 and 2023 [246]. - The company expects to manage interest rate risk effectively, with substantially all long-term debt at a fixed rate as of December 31, 2024 [242].