Ohio | 1-4879 | 34-0183970 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
5995 Mayfair Road, P.O. Box 3077, North Canton, Ohio | 44720-8077 | |||
(Address of principal executive offices) | (Zip Code) |
Item 2.02 Results of Operations and Financial Condition |
Item 9.01 Financial Statements and Exhibits |
(d) Exhibits. | ||||
Exhibit | ||||
Number | Description | |||
99.1 | News release of Diebold, Incorporated dated October 25, 2012 |
Diebold, Incorporated | ||||
October 25, 2012 | By: | /s/ Bradley C. Richardson | ||
Name: | Bradley C. Richardson | |||
Title: | Executive Vice President and Chief Financial Officer |
Exhibit | ||
Number | Description | |
99.1 | News release of Diebold, Incorporated dated October 25, 2012 |
![]() | ||
Media contact: | Investor contact: | |
Mike Jacobsen, APR | Nick Codispoti | |
+1 330 490 3796 | +1 330 490 3513 | |
michael.jacobsen@diebold.com | nick.codispoti@diebold.com |
• | 3Q EPS from continuing operations of $0.27, or $0.39 non-GAAP* |
• | Total revenue for 3Q 2012 increased 0.1% compared with prior-year period, or 5.6% on constant currency |
• | Free cash use* for 3Q 2012 increased $40.5 million from 3Q 2011, but improved on a YTD basis by $28.5 million; net debt* at 9/30/12 was $151.2 million, a decrease of $81.1 million; |
• | Security revenue grew 7.7% during the quarter; |
• | Company reduces YE earnings guidance to reflect customer project delays in Brazil and mix shift in North America |
• | Revenue |
Previous Guidance | Current Guidance | |
Total revenue | 6% to 8% | Approximately 6% |
Financial self-service | 10% to 12% | 8% to 9% |
Security | 1% to 4% | 3% to 4% |
Brazil election sys. / lottery | $45 million to $55 million | $50 million to $55 million |
• | Earnings per share |
Previous Guidance | Current Guidance | |
2012 EPS (GAAP) | $2.31 - $2.44 | $1.91 - $1.99 |
Restructuring charges | 0.08 - 0.06 | 0.15 - 0.13 |
Non-routine exp. | 0.04 - 0.03 | 0.03 - 0.02 |
Impairment | 0.07 | 0.16 |
2012 EPS non-GAAP* | $2.50 - $2.60 | $2.25 - $2.30 |
Revenue Summary by Product and Service Solutions | |||||||||||||||||||||
(In Thousands) | |||||||||||||||||||||
Q3 2012 | Q3 2011 | % Change | YTD 9/30/2012 | YTD 9/30/2011 | % Change | ||||||||||||||||
Financial Self-Service | |||||||||||||||||||||
Service | $ | 293,694 | $ | 288,176 | 1.9 | % | $ | 889,216 | $ | 837,969 | 6.1 | % | |||||||||
Product | 236,994 | 235,595 | 0.6 | % | 792,166 | 659,313 | 20.2 | % | |||||||||||||
Total Fin. Self-Service | 530,688 | 523,771 | 1.3 | % | 1,681,382 | 1,497,282 | 12.3 | % | |||||||||||||
Security Solutions | |||||||||||||||||||||
Service | 108,611 | 100,810 | 7.7 | % | 306,699 | 304,330 | 0.8 | % | |||||||||||||
Product | 45,879 | 42,601 | 7.7 | % | 126,692 | 130,445 | (2.9 | )% | |||||||||||||
Total Security | 154,490 | 143,411 | 7.7 | % | 433,391 | 434,775 | (0.3 | )% | |||||||||||||
Total Fin. Self-Service & Security | 685,178 | 667,182 | 2.7 | % | 2,114,773 | 1,932,057 | 9.5 | % | |||||||||||||
Brazil Election Systems & Lottery | 24,741 | 42,140 | (41.3 | )% | 36,825 | 53,804 | (31.6 | )% | |||||||||||||
Total Revenue | $ | 709,919 | $ | 709,322 | 0.1 | % | $ | 2,151,598 | $ | 1,985,861 | 8.3 | % | |||||||||
Revenue Summary by Geographic Segment | |||||||||||||||||||||
Q3 2012 | Q3 2011 | % Change | YTD 9/30/2012 | YTD 9/30/2011 | % Change | ||||||||||||||||
Diebold North America | $ | 395,477 | $ | 364,144 | 8.6 | % | $ | 1,194,294 | $ | 1,008,100 | 18.5 | % | |||||||||
Diebold International | |||||||||||||||||||||
Latin America (incl. Brazil) | 144,696 | 170,401 | (15.1 | )% | 445,693 | 447,495 | (0.4 | )% | |||||||||||||
Asia Pacific | 99,439 | 101,493 | (2.0 | )% | 291,788 | 281,504 | 3.7 | % | |||||||||||||
Europe, Middle East, Africa | 70,307 | 73,284 | (4.1 | )% | 219,823 | 248,762 | (11.6 | )% | |||||||||||||
Total Diebold International | 314,442 | 345,178 | (8.9 | )% | 957,304 | 977,761 | (2.1 | )% | |||||||||||||
Total Revenue | $ | 709,919 | $ | 709,322 | 0.1 | % | $ | 2,151,598 | $ | 1,985,861 | 8.3 | % |
Q3 2012 | Q3 2011 | YTD 9/30/2012 | YTD 9/30/2011 | |||||||||
Miscellaneous, net | $ | 607 | $ | (447 | ) | $ | 948 | $ | 1,010 | |||
Foreign exchange gain (loss), net | 930 | (349 | ) | 2,577 | 97 | |||||||
Interest expense | (7,615 | ) | (8,110 | ) | (22,684 | ) | (26,298 | ) | ||||
Investment income | 9,298 | 8,538 | 29,292 | 29,105 | ||||||||
Total other income (expense), net | $ | 3,220 | $ | (368 | ) | $ | 10,133 | $ | 3,914 |
1. | Profit/loss summary - 3rd quarter comparison (Dollars in millions) |
Q3 2012 | Q3 2011 | |||||||||||||||||||||
Rev | Gross Profit | % of Sales | OPEX | OP | % of Sales | Rev | Gross Profit | % of Sales | OPEX | OP | % of Sales | |||||||||||
$709.9 | $173.2 | 24.4 | % | $150.6 | $22.7 | 3.2 | % | GAAP Results | $709.3 | $194.4 | 27.4 | % | $140.0 | $54.4 | 7.7 | % | ||||||
(1.1 | ) | (3.6 | ) | 2.5 | Restructuring | (0.7 | ) | (2.1 | ) | 1.4 | ||||||||||||
— | (0.6 | ) | 0.6 | Non-rout. Exp | — | (2.6 | ) | 2.6 | ||||||||||||||
— | — | — | Non-rout. Inc | — | — | — | ||||||||||||||||
— | (7.9 | ) | 7.9 | Impairment | — | — | — | |||||||||||||||
$709.9 | $172.1 | 24.2 | % | $138.4 | $33.7 | 4.7 | % | Non-GAAP Results | $709.3 | $193.7 | 27.3 | % | $135.3 | $58.4 | 8.2 | % |
YTD 9/30/2012 | YTD 9/30/2011 | |||||||||||||||||||||
Rev | Gross Profit | % of Sales | OPEX | OP | % of Sales | Rev | Gross Profit | % of Sales | OPEX | OP | % of Sales | |||||||||||
$2,151.6 | $552.0 | 25.7 | % | $434.8 | $117.2 | 5.4 | % | GAAP Results | $1,985.9 | $513.3 | 25.8 | % | $424.9 | $88.4 | 4.5 | % | ||||||
(1.9 | ) | (6.8 | ) | 4.9 | Restructuring | 8.3 | (9.4 | ) | 17.7 | |||||||||||||
— | (1.9 | ) | 1.9 | Non-rout. Exp | — | (13.1 | ) | 13.1 | ||||||||||||||
— | — | — | Non-rout. Inc | — | — | — | ||||||||||||||||
— | (14.6 | ) | 14.6 | Impairment | — | (3.0 | ) | 3.0 | ||||||||||||||
$2,151.6 | $550.2 | 25.6 | % | $411.5 | $138.6 | 6.4 | % | Non-GAAP Results | $1,985.9 | $521.6 | 26.3 | % | $399.4 | 122.1 | 6.2 | % |
2. | Reconciliation of diluted GAAP EPS to non-GAAP EPS from continuing operations measures: |
Q3 2012 | Q3 2011 | YTD 9/30/2012 | YTD 9/30/2011 | |||||||||
Total EPS from continuing operations (GAAP measure) | $ | 0.27 | $ | 0.65 | $ | 1.39 | $ | 0.99 | ||||
Restructuring charges | 0.02 | 0.02 | 0.05 | 0.22 | ||||||||
Non-routine expenses | 0.01 | 0.02 | 0.02 | 0.12 | ||||||||
Impairment charges | 0.09 | — | 0.16 | 0.03 | ||||||||
Total adjusted EPS (non-GAAP measure) | $ | 0.39 | $ | 0.69 | $ | 1.62 | $ | 1.36 |
3. | Free cash flow / (use) is calculated as follows: |
Q3 2012 | Q3 2011 | YTD 9/30/2012 | YTD 9/30/2011 | |||||||||
Net cash provided by (used in) operating activities (GAAP measure) | $ | 5,214 | $ | 45,310 | $ | (28,756 | ) | $ | (54,664 | ) | ||
Capital expenditures | (15,187 | ) | (14,769 | ) | (35,856 | ) | (38,456 | ) | ||||
Free cash flow / (use) (non-GAAP measure) | $ | (9,973 | ) | $ | 30,541 | $ | (64,612 | ) | $ | (93,120 | ) |
4. | Net investment/(debt) is calculated as follows: |
9/30/2012 | 12/31/2011 | 9/30/2011 | |||||||
Cash, cash equivalents and short-term investments (GAAP measure) | $ | 572,164 | $ | 620,773 | $ | 472,210 | |||
Debt instruments | (723,321 | ) | (628,503 | ) | (704,436 | ) | |||
Net investment/(debt) (non-GAAP measure) | $ | (151,157 | ) | $ | (7,730 | ) | $ | (232,226 | ) |
• | competitive pressures, including pricing pressures and technological developments; |
• | changes in the company's relationships with customers, suppliers, distributors and/or partners in its business ventures; |
• | changes in political, economic or other factors such as currency exchange rates, inflation rates, recessionary or expansive trends, taxes and regulations and laws affecting the worldwide business in each of the company's operations, including Brazil, where a significant portion of the company's revenue is derived; |
• | global economic conditions, including any additional deterioration and disruption in the financial markets, including the bankruptcies, restructurings or consolidations of financial institutions, which could reduce our customer base and/or adversely affect our customers' ability to make capital expenditures, as well as adversely impact the availability and cost of credit; |
• | acceptance of the company's product and technology introductions in the marketplace; |
• | the company's ability to maintain effective internal controls; |
• | changes in the company's intention to repatriate cash and cash equivalents and short-term investments residing in international tax jurisdictions could negatively impact foreign and domestic taxes; |
• | unanticipated litigation, claims or assessments, as well as the outcome/impact of any current/pending litigation, claims or assessments, including with respect to the company's Brazilian tax dispute; |
• | variations in consumer demand for financial self-service technologies, products and services; |
• | potential security violations to the company's information technology systems; |
• | the investment performance of our pension plan assets, which could require us to increase our pension contributions, and significant changes in health care costs, including those that may result from government action; |
• | the amount and timing of repurchases of the company's common shares, if any; |
• | the outcome of the company's global FCPA review and any actions taken by government agencies in connection with the company's self disclosure, including the pending DOJ and SEC investigations; and |
• | the company's ability to achieve benefits from its cost-reduction initiatives and other strategic changes, including its restructuring actions. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net Sales | |||||||||||||||
Service | $ | 402,305 | $ | 388,986 | $ | 1,196,079 | $ | 1,142,311 | |||||||
Product | 307,614 | 320,336 | 955,519 | 843,550 | |||||||||||
Total | 709,919 | 709,322 | 2,151,598 | 1,985,861 | |||||||||||
Cost of goods | |||||||||||||||
Service | 301,787 | 277,558 | 881,275 | 841,571 | |||||||||||
Product | 234,922 | 237,378 | 718,304 | 631,010 | |||||||||||
Total | 536,709 | 514,936 | 1,599,579 | 1,472,581 | |||||||||||
Gross Profit | 173,210 | 194,386 | 552,019 | 513,280 | |||||||||||
Percent of net sales | 24.4 | % | 27.4 | % | 25.7 | % | 25.8 | % | |||||||
Operating expenses | |||||||||||||||
Selling, general and administrative | 120,455 | 121,508 | 359,053 | 364,670 | |||||||||||
Research, development and engineering | 22,167 | 18,466 | 61,140 | 57,265 | |||||||||||
Impairment of assets | 7,930 | — | 14,631 | 2,962 | |||||||||||
Total | 150,552 | 139,974 | 434,824 | 424,897 | |||||||||||
Percent of net sales | 21.2 | % | 19.7 | % | 20.2 | % | 21.4 | % | |||||||
Operating profit | 22,658 | 54,412 | 117,195 | 88,383 | |||||||||||
Percent of net sales | 3.2 | % | 7.7 | % | 5.4 | % | 4.5 | % | |||||||
Other income (expense), net | 3,220 | (368 | ) | 10,133 | 3,914 | ||||||||||
Income from continuing operations before taxes | 25,878 | 54,044 | 127,328 | 92,297 | |||||||||||
Taxes on income | (7,814 | ) | (11,262 | ) | (35,507 | ) | (23,767 | ) | |||||||
Income from continuing operations | 18,064 | 42,782 | 91,821 | 68,530 | |||||||||||
Income from discontinued operations, net of tax | — | — | — | 518 | |||||||||||
Net income | 18,064 | 42,782 | 91,821 | 69,048 | |||||||||||
Less: net income attributable to noncontrolling interest | (630 | ) | (1,027 | ) | (2,722 | ) | (3,988 | ) | |||||||
Net income attributable to Diebold, Inc. | $ | 17,434 | $ | 41,755 | $ | 89,099 | $ | 65,060 | |||||||
Basic weighted average shares outstanding | 63,211 | 63,626 | 63,003 | 64,797 | |||||||||||
Diluted weighted average shares outstanding | 64,134 | 64,186 | 63,930 | 65,304 | |||||||||||
Basic Earnings Per Share: | |||||||||||||||
Income from continuing operations | $ | 0.28 | $ | 0.66 | $ | 1.41 | $ | 0.99 | |||||||
Income from discontinued operations | — | — | — | 0.01 | |||||||||||
Net income | $ | 0.28 | $ | 0.66 | $ | 1.41 | $ | 1.00 | |||||||
Diluted Earnings Per Share: | |||||||||||||||
Income from continuing operations | $ | 0.27 | $ | 0.65 | $ | 1.39 | $ | 0.99 | |||||||
Income from discontinued operations | — | — | — | 0.01 | |||||||||||
Net income | $ | 0.27 | $ | 0.65 | $ | 1.39 | $ | 1.00 | |||||||
Amounts Attributable to Diebold, Inc. | |||||||||||||||
Income from continuing operations | $ | 17,434 | $ | 41,755 | $ | 89,099 | $ | 64,542 | |||||||
Income from discontinued operations | — | — | — | 518 | |||||||||||
Net income attributable to Diebold, Inc. | $ | 17,434 | $ | 41,755 | $ | 89,099 | $ | 65,060 |
September 30, 2012 | December 31, 2011 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 302,550 | $ | 333,920 | |||
Short-term investments | 269,614 | 286,853 | |||||
Trade receivables, net | 462,498 | 414,969 | |||||
Inventories | 490,691 | 440,900 | |||||
Other current assets | 262,717 | 255,713 | |||||
Total current assets | 1,788,070 | 1,732,355 | |||||
Securities and other investments | 74,840 | 74,869 | |||||
Property, plant and equipment, net | 182,826 | 192,694 | |||||
Goodwill | 271,911 | 253,063 | |||||
Other assets | 278,107 | 264,462 | |||||
Total assets | $ | 2,595,754 | $ | 2,517,443 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities | |||||||
Notes payable | $ | 75,000 | $ | 21,722 | |||
Accounts payable | 219,446 | 221,964 | |||||
Other current liabilities | 526,987 | 580,531 | |||||
Total current liabilities | 821,433 | 824,217 | |||||
Long-term debt | 647,863 | 606,154 | |||||
Long-term liabilities | 232,980 | 228,812 | |||||
Total Diebold, Inc. shareholders' equity | 861,490 | 826,986 | |||||
Noncontrolling Interests | 31,988 | 31,274 | |||||
Total equity | 893,478 | 858,260 | |||||
Total liabilities and equity | $ | 2,595,754 | $ | 2,517,443 |
Nine Months Ended | ||||||||
September 30, | ||||||||
2012 | 2011 | |||||||
Cash flow from operating activities: | ||||||||
Net income | $ | 91,821 | $ | 69,048 | ||||
Adjustments to reconcile net income to cash flow from operating activities: | ||||||||
Depreciation and amortization | 56,909 | 58,638 | ||||||
Impairment of assets | 14,631 | 2,962 | ||||||
Other | 7,453 | 7,668 | ||||||
Cash flow from changes in certain assets and liabilities: | ||||||||
Trade receivables | (49,683 | ) | (36,418 | ) | ||||
Inventories | (55,397 | ) | (84,179 | ) | ||||
Accounts payable | (2,013 | ) | 3,271 | |||||
Certain other assets and liabilities | (92,477 | ) | (75,654 | ) | ||||
Net cash used in operating activities | (28,756 | ) | (54,664 | ) | ||||
Cash flow from investing activities: | ||||||||
Payments for acquisitions, net of cash acquired | (23,625 | ) | — | |||||
Proceeds from sale of discontinued operations | — | 2,520 | ||||||
Net investment activity | (4,011 | ) | 39,802 | |||||
Capital expenditures | (35,856 | ) | (38,456 | ) | ||||
Increase in certain other assets & other | 5,042 | 480 | ||||||
Net cash (used in) provided by investing activities | (58,450 | ) | 4,346 | |||||
Cash flow from financing activities: | ||||||||
Dividends paid | (54,573 | ) | (55,146 | ) | ||||
Net borrowings | 94,333 | 138,748 | ||||||
Repurchase of common shares | (3,076 | ) | (104,852 | ) | ||||
Other | 16,264 | (2,325 | ) | |||||
Net cash provided by (used in) financing activities | 52,948 | (23,575 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 2,888 | 2,049 | ||||||
Decrease in cash and cash equivalents | (31,370 | ) | (71,844 | ) | ||||
Cash and cash equivalents at the beginning of the period | 333,920 | 328,658 | ||||||
Cash and cash equivalents at the end of the period | $ | 302,550 | $ | 256,814 |
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