Unisys says it repaid 7¼% notes last week, lowered total debt

By Paul Deckelman

New York, Jan. 25 - Unisys Corp. said on Tuesday that it had repaid at maturity last week all $150 million of its outstanding 7¼% senior notes. The repayment was made on Jan. 18, using cash on hand. It reduced the company's long-term debt to about $900 million.

Chief financial officer Janet Haugen also told analysts on a morning conference call following the release of the company's fourth-quarter and 2004 results that the Blue Bell, Pa.-based technology solutions company ended the quarter with no borrowings against its revolving credit facilities and $661 million of cash on hand.

Haugen said that during the fourth quarter Unisys accumulated $227 million of cash from operations, down from $370 million a year earlier, and had cash from operations of $470 million for the full year, down from $571 million in 2003.

Free cash flow totaled $104 million for the fourth quarter and $134 million for all of 2004, versus year-earlier figures of $259 million and $36 million, respectively.

She said that Unisys anticipates free cash flow of more than $50 million for 2005.

Unisys - which warned investors on January 11 that it would report a loss for the fourth quarter, rather than the profit it had previously predicted, posted a net loss for the quarter of $34.9 million (10 cents per share), a sharp reversal of its year-earlier net income of $111.5 million (33 cents per share). Revenue declined 7% to $1.52 billion from $1.64 billion in the year-ago quarter.

For the full year of 2004, Unisys reported net income of $38.6 million (11 cents per share), well down from full-year 2003 net income of $258.7 million (78 cents per share).

The company's president and chief executive officer, Joseph McGrath, cautioned that some of the problems seen in the fourth-quarter would continue into early 2005, including weak sales of computer servers and continuing problems in some of its service contracts.

It expects revenue to decline by the low-single digits as a percentage during the first quarter, resulting in breakeven earnings or a small loss. For the full year 2005, Unisys - only last month issued guidance - revised those projections downward to a profit in the range of 50 cents to 60 cents per share. The company also expects that the percentage of revenue growth will be in the low-single to mid-single digits.

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