Unisys Corporation New

Thank you for holding, everyone. We are experiencing some technical difficulties, but I would now like to turn the conference over to Courtney Holden, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon, everyone. This is Courtney Holden, Vice President of Investor Relations. Thank you for joining us. Earlier today, Unisys released its first quarter 2020 financial results. I'm joined this afternoon to discuss those results by Peter Altebeff, our Chairman and CEO, and Mike Thompson, our CFO. Before we begin, I'd like to cover a few details. First, today's conference call and the Q&A session are being webcast via the Unisys investor website. Second, you can find the earnings press release and the presentation slides that we will be using this afternoon to guide our discussion, as well as other information relating to our first quarter performance on our investor website, which we encourage you to visit. Third, today's presentation, which is complementary to the earnings press release, include some non-GAAP financial measures. The non-GAAP measures have been reconciled to the related GAAP measures, and we've provided reconciliations within the presentation. Although appropriate under generally accepted accounting principles, the company's results reflect charges that the company believes are not indicative of its ongoing operations and that can make its profitability and liquidity results difficult to compare to prior periods, anticipated future periods, or to its competitors' results. These items consist of pension, debt exchange, cost reduction, and other expense. Management believes each of these items can distort the visibility of trends associated with the company's ongoing performance. Management also believes that the evaluation of the company's financial performance can be enhanced by using supplemental presentation of its results that exclude the impact of these items in order to enhance consistency and comparativeness with prior or future period results. The following measures are often provided and utilized by the company's management, analysts, and investors to enhance comparability of year-over-year results as well as to compare results to other companies in our industry. Non-GAAP operating profit, non-GAAP diluted earnings per share, free cash flow and adjusted free cash flow, EBITDA and adjusted EBITDA, and constant currency. In addition, this quarter we will be continuing to report non-GAAP adjusted revenue and related measures as a result of certain revenue relating to reimbursements from the company's check processing JV partners for restructuring expenses included as part of the company's restructuring program. For more information regarding these adjustments, please see our earnings release and our Form 10-Q. From time to time, Unisys may provide specific guidance or color regarding its expected future financial performance. Such information is effective only on the date given. UNISIS generally will not update, reaffirm, or otherwise comment on any such information except as UNISIS deems necessary, and then only in a manner that complies with Regulation FD. And finally, I'd like to remind you that all forward-looking statements made during this conference call are subject to various risks and uncertainties that could cause the actual results to differ materially from our expectations. These factors are discussed more fully in the earnings release and in the company's SEC filing. Copies of those SEC reports are available from the SEC and along with other materials I mentioned earlier on the Unisys Investor website. And now I'd like to turn the call over to Peter.

Thank you, Courtney, and thank you all for joining us today. We hope that you, your families, and friends are safe and healthy during this difficult time. As we all know, the world has changed significantly since the beginning of the year. So I will address COVID-19 before we turn to first quarter results. I'm proud of how our team has responded to the current situation in support of our clients and each other. Our priorities during this critical time center on the safety and well-being of our associates, clients, and partners, providing the best service and most innovative solutions possible for our clients to help them through their challenges during this time and positioning the company to emerge from the COVID-19 period in a position of strength. We moved quickly to encourage all our associates to work from home and within a very short period of time had more than 95% of our operations securely enabled for remote access. We were already technology enabled for remote working. Several years ago, We adopted video conferencing and voice over IP as our primary connectivity across the company. Most of our associates are equipped with laptops. In the limited instances where this was not the case, we worked quickly to provide the needed devices or find alternate options for management of workloads. We have also deployed Unisys Stealth across our organization, which allows us to avoid the security issues For the associates who cannot work remotely, such as those performing essential services in person with clients like our field services team, we are doing everything we can to ensure their safety, including providing PPE as available and utilizing government-recommended health practices. We have implemented our business continuity planning procedures. These are ISO certified and provide for adjustments such as shifting service desk operations from affected client locations or others that can accommodate client requirements or redeploying underutilized field service engineers to help support service desks experiencing increased call volumes. We've also received essential service designations where necessary. We've had a crisis management team in place for a number of years. While COVID-19 has not triggered our crisis management plan, a subset of this team has been helpful in providing oversight of operations. To date, there have been no material disruptions to delivery of services to our clients. Digital workplace services, particularly work from home capabilities, has been much in the news and is a source of strength for Unisys, representing approximately a third of total 2019 non-GAAP adjusted revenue. We are active in the COVID-19 fight, including by supporting digital workplace solutions that help assist clients in the healthcare and pharmaceutical industries that are providing life-saving medical equipment and drugs. Our ClearPath Forward operating system helps clients in the financial services industry to be able to continue to support their customers' online banking needs. And air cargo businesses use the Unisys cloud-based logistic system to support their operations. As we have supported our clients, our goal has not been just to get through this, but to do so in a way that stands out and inspires confidence in our ability to provide a broader spectrum of services. Unisys is highly diversified across several vectors and we consider that a particular strength at this time, especially where geographies and industry vectors are being differently affected by the COVID-19 situation. We have a diversified client base with no single client accounting for more than 5% of revenue. In the first quarter, 44% of non-gap adjusted revenue came from the US and Canada with 56% of revenue From an industry sector perspective, 37% of non-GAAP-adjusted revenue was earned from commercial clients, 30% from financial services, and 33% from public sector clients, which include U.S. state and local, foreign governments, and license and other revenue from SAIC for the U.S. federal government. The strength of our diversity is more than geography and client base alone. We also value gender and ethnic origin diversity. And especially in the current situation, this diversity leads to different perspectives, methodologies, and approaches, which is critical to developing the best solutions in a quickly changing environment. Following the flexibility that resulted from the sale of our U.S. federal division, We were already planning to increase our investment in capabilities that allow us to better serve our clients, and we are continuing with these efforts. We have several of these programs underway, including our ERP modernization program, an enhanced workforce management capability, and a digital sales and marketing platform. So we will be well prepared coming out of the COVID-19 situation. Now, withstanding these investments, We are also closely managing our costs with a goal of mitigating the near-term impact of lower revenue while also maintaining our ability to provide the necessary support for our clients both now and as demand rebounds in the future. With this balance in mind, we are taking actions such as temporary salary reductions for the senior leadership team, reduction of third-party spend for contractors, redeploying our workforce based on shifting needs of the business, limiting expenses such as travel, some of which happens naturally based on stay-at-home orders in place, reducing work weeks, and utilizing furloughs where necessary. Longer term, we are also looking at reducing the level of expenses in the new normal, such as our real estate footprint and ongoing travel costs. Turning to our first quarter activities, We had higher non-GAAP operating profit and margin year over year. We also announced and closed the sale of our US federal business, which has improved our capital structure and improved our operating flexibility. Due to the COVID-19 situation, we have been looking at various scenarios of what our 2020 financials could look like. And several of those scenarios indicate that a 2020 full-year non-gap adjusted revenue may be down approximately 10% year over year, although it could be more or less than that, with an expectation of a more significant impact to profitability. Given the limited visibility into macroeconomic conditions at this point, we are withdrawing our previously provided guidance for 2020. Nonetheless, our business fundamentals remain strong. and we believe there is upside when stability returns to global markets. We believe in our solutions and are continuing to invest to bring increasing value to our clients. These solutions include Intelliserve, Cloud Forte, Stealth, ClearPath Forward and our industry focused solutions. Our industry go to market approach supported by our solutions which are being leveraged across industries is resonating with clients. Many of those solutions are aimed directly at helping clients address key issues that have been highlighted by the COVID-19 pandemic, such as cloud enablement, digital workplace transformation, and cybersecurity. We are leveraging, for instance, our Intelliserve platform in our digital workplace services go-to-market efforts. Gartner recently named us as a leader in its magic quadrant for managed workplace services North America for the second consecutive year. We believe this positioning reflects the investments we are making to integrate AI, robotic process automation, advanced analytics, and machine learning. As an example of how clients are implementing Intelliserve, a large new logo global frozen food company signed a contract with Unisys in the first quarter, which among other things will modernize the company's IT environment and service desk support through implementation of Unisys IntelliServe. As another key solution, Cloud Forte is gaining increased traction. During the first quarter, we achieved Amazon's well-architected framework partner designation for this offering, which we believe will further differentiate it. As an example of how clients are using Cloud Forte, in the first quarter, we expanded our contract with California State University to integrate their information resources and deliver innovative education and administrative services to their students and faculty. We support CSU across all 23 campuses and our solutions are especially relevant as remote access has become critical for educational institutions. Services is always evolving at Unisys and we recently announced the general availability of Unisys Always On Access powered by Stealth or AOA. Unisys AOA is a next generation solution providing advantages over traditional VPNs. AOA delivers secure access regardless of location, leveraging Stealth features such as endpoint protection and dynamic isolation to enable an organization to remain always on even in the face of threats. In the first quarter, Stealth also received updated NIAP certification, which is a designation across 31 countries that approves the solution to handle top-secret classified information. Providing our medal to the real world, we also hosted a Capture the Flag event at the February RSA Conference, where contestants attempted to capture data and credentials protected by Stealth. but Stealth remains undefeated and so no one earned the reward money and instead we donated it to Women in Cybersecurity, an important mentoring and networking organization. We often package Stealth with our other solutions and one example was a first quarter new logo which was a signing for a $140 million contract with a major commercial defense contractor to serve its operations. So this contract was not transferred as part of the US Federal sale. Under the new relationship, we are providing comprehensive cross-functional IT services, including stealth. As I said previously, I am proud of how our team has responded to the macro events we are all facing. We will continue to keep our focus on the health and safety of our associates, our clients, and our partners, while also providing ongoing services at the high level of standards to which we hold ourselves and positioning ourselves to emerge from COVID-19 with strength. I'll now turn the call over to Mike who will provide more color on our first quarter results.