) recently announced that it has priced an offering of $210,000,000
of senior notes scheduled to mature in 2017. The notes carry a
coupon of 6.25% and Unisys will pay semi-annual interest on the
notes in arrears on February 15 and August 15 every year. The first
interest will be paid on February 15, 2013.
Unisys expects to close the offering on August 21, 2012.
Management intends to use the net proceeds from this offering to
redeem all of the company's outstanding 12.75% senior secured notes
due 2014, including payment of accrued interest and premium.
In the first half of 2012, Unisys repaid a long-term debt worth
$68.5 million. This comprises all of the remaining $25.5 million of
its 14.25% senior secured notes due 2015, $40.0 million of its
12.5% senior notes due 2016 and $3.0 million of its 12.75% senior
secured notes due 2014.
On July 25, 2012, the company called for redemption of
$84.5 million of its 12.5% senior notes due January 2016. Unisys
expects to incur a charge of approximately $6.4 million in the
third quarter of 2012 related to the redemption. The debt reduction
will result in an approximate $10 million declinein annual interest
At the end of June 30, 2012, Unisys had cash and equivalents of
$659.7 million, down from $714.9 million at the end of December 31,
2011. Long term debt stood at $291.8 million, down from $358.8
million at the end of December 2011.
Earlier, Unisys reported second-quarter 2012 results, which were
ahead of the Zacks Consensus Estimate. Unisys generated revenues of
$921 million in the second quarter of 2012, down 2% from the
year-ago quarter and 0.8% sequentially.
Unisys posted a net income (including pension expenses) of $46.6
million or 99 cents per diluted share in the second quarter of 2012
compared with a net loss (including debt reduction charge, post-tax
charge and pension charge) of $11.6 million or 27 cents per diluted
share in the year-ago quarter, and a net income (including a charge
related to debt reduction and pension expense) of $13.4 million or
30 cents per diluted share in the first quarter of 2012.
Excluding these charges and expenses, net income for the quarter
came in at $1.41 per diluted share versus $1.07 per diluted share
in the year-earlier quarter and 97 cents per diluted share in the
The macroeconomic conditions continue to be challenging for
Unisys. We have a Neutral recommendation on the stock. The stock
currently carries a Zacks #1 Rank, which translates into a
short-term rating of Strong Buy.
UNISYS (UIS): Free Stock Analysis Report
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