EX-99.1 2 l15209aexv99w1.txt EX-99.1 PRESS RELEASE EXHIBIT 99.1 [DIEBOLD LOGO] NEWSRELEASE Media contact: Investor contact: Mike Jacobsen John Kristoff +1 330 490 3796 +1 330 490 5900 jacobsm1@diebold.com kristoj@diebold.com FOR IMMEDIATE RELEASE: July 27, 2005 DIEBOLD REPORTS SECOND QUARTER FINANCIAL RESULTS NORTH CANTON, Ohio -- Diebold, Incorporated (NYSE: DBD) today reported second quarter 2005 revenue from continuing operations of $629.2 million, up 15.3 percent from the second quarter of 2004. The company reported second quarter net income of $33.3 million, compared to net income of $43.6 million in the second quarter of 2004. Diluted earnings per share were $.47, a decline of 21.7 percent from $.60 per share in the second quarter of 2004 and within the most recent guidance of $.47 to $.50 per share. Included in the second quarter 2005 reported results are restructuring charges of approximately $.03 per share and European Opteva manufacturing startup costs and related issues* of $.04 per share. Excluding the impact of the restructuring charges and the European startup costs and related issues*, diluted earnings per share in the second quarter would have been $.54 per share, consistent with previous guidance. As previously announced on July 5, 2005, the company sold its campus card systems division. As a result, the financial results from this business have been classified as a discontinued operation. SECOND QUARTER HIGHLIGHTS - Total product orders, excluding election systems and the Brazilian lottery business, grew in the high single-digit range led by double-digit growth in the Europe, Middle East and Africa (EMEA) region. - The company secured a large order for lottery machines in Brazil for approximately $52 million. - Total Opteva orders were approximately $131 million, an increase of more than 58 percent from the second quarter 2004. - Security solutions revenue grew 25.0 percent and 24.1 percent on a fixed exchange-rate basis*. - Asia Pacific total revenue increased 49.9 percent, and 45.4 percent on a fixed exchange-rate basis*. - EMEA financial self-service revenue increased 14.2 percent, and 10.8 percent on a fixed exchange-rate basis*. - Receivable days sales outstanding improved 18 days, moving from 92 days at June 30, 2004 to 74 days at June 30, 2005. *See accompanying notes for non-GAAP measures. (more) PAGE 2/ DIEBOLD ANNOUNCES SECOND QUARTER RESULTS FINANCIAL RESULTS "We are clearly disappointed with our profitability during the quarter," said Walden W. O'Dell, Diebold chairman and chief executive officer. "As we previously indicated, most of the markets in which we compete remain healthy and we once again experienced strong growth in orders and backlog during the quarter. However, slower than anticipated upgrade and replacement activity in the North America regional bank segment, cost challenges in our transition to a single global product platform, a higher mix of lower-margin revenue and negative foreign currency exchange impact due to the strengthening of the dollar in the quarter are negatively impacting our profit margins." O'Dell added, "We are focused on improving the profitability of our business. In addition to previously disclosed cost-reduction actions, we are initiating some strategic changes within our organization. These changes are aimed at increasing the effectiveness of the functions across Diebold to better support our global efforts. The most sweeping of these changes is the establishment of a single Global Marketing organization, formed through consolidating several channel-based marketing functions. These changes will streamline our operations and drive improved efficiency and knowledge management throughout the company. Also, we have restructured our Global Software & Services organization by integrating all its functions into other existing organizations to better leverage resources and combine similar knowledge bases within the company. "As a result of these and other actions, we anticipate cost reductions of approximately $20 million on an annual basis. I am confident that these structural changes to our organization, as well as our other cost-saving initiatives, will significantly improve our profitability and competitiveness in the marketplace." FIXED EXCHANGE-RATE SECOND QUARTER ORDERS Total orders for products and services increased in the high single-digit range, excluding election systems and Brazilian lottery equipment business during the second quarter. Financial self-service orders increased in the mid single-digit range, led by double-digit growth in EMEA. Security orders remain strong, increasing in the double-digit range. Orders in election systems increased significantly due to the previously disclosed equipment order in Ohio. *See accompanying notes for non-GAAP measures. (more) PAGE 3/ DIEBOLD ANNOUNCES SECOND QUARTER RESULTS REVENUE Total revenue from continuing operations for the quarter was $629.2 million, up $83.5 million, or 15.3 percent and 12.4 percent on a fixed exchange-rate basis*. Total financial self-service revenue increased 11.7 percent and 8.0 percent on a fixed exchange-rate basis*. Security solutions revenue grew 25.0 percent and 24.1 percent on a fixed exchange-rate basis*. Total financial self-service and security revenue increased by 15.0 percent and 12.0 percent on a fixed exchange-rate basis*. REVENUE SUMMARY BY PRODUCT AND SERVICE SOLUTIONS (In Thousands -- Quarter Ended June 30, 2005)
% Change % Change 2005 2004 GAAP fixed rate* -------- -------- ---- ----------- FINANCIAL SELF-SERVICE Products $212,690 $178,630 19.1% 16.3% Services 221,000 209,645 5.4% 1.1% -------- -------- ---- ---- Total Fin. self-service 433,690 388,275 11.7% 8.0% SECURITY SOLUTIONS Products 66,807 61,736 8.2% 6.9% Services 96,042 68,590 40.0% 39.7% -------- -------- ---- ---- Total Security 162,849 130,326 25.0% 24.1% -------- -------- ---- ---- Total Fin. self-service & security 596,539 518,601 15.0% 12.0% Election systems 32,684 27,128 20.5% 20.5% -------- -------- ---- ---- Total Revenue from Continuing Operations $629,223 $545,729 15.3% 12.4% ======== ======== ==== ====
REVENUE SUMMARY BY GEOGRAPHIC AREA (In Thousands -- Quarter Ended June 30, 2005 )
% Change % Change 2005 2004 GAAP fixed rate* -------- -------- ---- ----------- THE AMERICAS Financial self-service solutions $288,859 $275,411 4.9% 1.2% Security solutions 150,356 122,769 22.5% 22.2% -------- -------- ---- ---- subtotal 439,215 398,180 10.3% 7.5% Election systems 32,684 27,128 20.5% 20.5% -------- -------- ---- ---- Total Americas 471,899 425,308 11.0% 8.3% ASIA PACIFIC Financial self-service solutions 57,539 36,446 57.9% 54.7% Security solutions 8,371 7,535 11.1% 3.0% -------- -------- ---- ---- Total Asia Pacific 65,910 43,981 49.9% 45.4% EUROPE, MIDDLE EAST, AFRICA Financial self-service solutions 87,292 76,418 14.2% 10.8% Security solutions 4,122 22 N/A N/A -------- -------- ---- ---- Total Europe, Middle East, Africa 91,414 76,440 19.6% 16.0% -------- -------- ---- ---- Total Revenue from Continuing Operations $629,223 $545,729 15.3% 12.4% ======== ======== ==== ====
*See accompanying notes for non-GAAP measures. (more) PAGE 4/ DIEBOLD ANNOUNCES SECOND QUARTER RESULTS CURRENCY IMPACT During the quarter, revenue was positively impacted by the year-over-year strengthening of the real, euro and certain other currencies. The positive currency impact in the second quarter was approximately $14.1 million or 2.6 percent versus the prior year reported results. GROSS MARGIN Total gross margin for the second quarter was 25.4 percent, compared to a strong 29.8 percent in the second quarter 2004. Included in total cost of sales in the second quarter 2005 was approximately $3.1 million of restructuring costs and $3.0 million of European Opteva manufacturing startup costs and related issues, which adversely impacted total gross margins by 1.0 percentage point. Product gross margin was 27.4 percent, compared to 35.4 percent in the second quarter 2004. Included in product cost of sales in the second quarter of 2005 was approximately $2.5 million in restructuring charges and one-time special items of approximately $2.8 million, which adversely impacted product gross margins by 1.7 percentage points. Additionally, the decrease in product gross margins was attributable to a heavier mix of revenue derived from lower-margin businesses for the second quarter versus 2004. This includes a higher percentage of national account revenue in the United States, a greater mix of lower-margin international revenue, particularly from India and Thailand, and increased revenue from the security and election systems businesses. Service gross margin was 23.4 percent, compared to 24.6 percent in the second quarter 2004. This decline was primarily the result of increased fuel costs. Included in the service cost of sales in the second quarter of 2005 was approximately $0.6 million in restructuring charges and $0.2 million in one-time special items, which adversely impacted service gross margins by 0.3 percentage points. OPERATING EXPENSES Total operating expenses for the quarter as a percent of revenue improved by 1.3 percentage points, moving to 16.6 percent from 17.9 percent in the second quarter 2004. Reduced selling, general and administrative expenses as a percentage of revenue accounted for 0.9 percentage points of the overall improvement to operating expenses. The improved leveraging of selling, general and administrative expenses was achieved due to aggressive controls on personnel costs and implementing a corporate-wide efficiency program. Reduced R&D expense resulting from ongoing product rationalization created by the Opteva rollout accounted for the balance of the improvement. OPERATING PROFIT Operating profit was 8.8 percent of revenue, down 3.1 percentage points from 11.9 percent in the second quarter of 2004. Included in the financial results was $3.5 million of restructuring costs and $3.2 million of European Opteva manufacturing startup costs and related issues, which adversely impacted operating profits by 1.1 percentage points. Excluding the impact of these charges*, operating profit margin would have been 9.9 percent in the second quarter 2005, a decrease of 2.0 percentage points from the second quarter 2004. *See accompanying notes for non-GAAP measures (more) PAGE 5/ DIEBOLD ANNOUNCES SECOND QUARTER RESULTS OTHER EXPENSE AND MINORITY INTEREST Other expense and minority interest increased to $7.6 million in expense for the quarter from $2.1 million in expense in the second quarter of 2004. This increase was due mainly to the impact of higher foreign exchange losses of $2.7 million in the quarter and higher interest expense. NET INCOME FROM CONTINUING OPERATIONS Net income from continuing operations was 5.2 percent of revenue compared to 7.9 percent in the second quarter 2004. The decline in net income as a percent of revenue was partially the result of restructuring charges of $3.5 million and $3.9 million in special charges. Excluding the impact of these special charges net income from continuing operations would have been 6.0 percent. This decline from the prior year was attributable to unfavorable revenue mix from less profitable geographies and accounts. BALANCE SHEET AND CASH FLOW HIGHLIGHTS The company's net debt* was $142.2 million at June 30, 2005 compared to $167.1 million at June 30, 2004. The $24.9 million decrease in net debt* over the last 12 months was principally due to the positive impact of $225.7 million in free cash flow*, partially offset by $74.5 million spent to repurchase company stock, $55.6 million in dividend payments, $45.0 million invested in acquisitions, $14.2 million in foreign exchange impact and $11.5 million invested in other assets. In the second quarter, free cash use* increased by $5.4 million, moving from a free cash use* of $18.8 million in the second quarter of 2004 to $24.2 million in the second quarter of 2005. The increase in free cash use* was due principally to higher capital expenditures, which increased by $5.6 million. DSO was 74 days at June 30, 2005, an 18-day improvement from 92 days at June 30, 2004. Inventory turns improved slightly from 5.0 at June 30, 2004 to 5.3 turns at June 30, 2005. STOCK OPTION AND RESTRICTED STOCK EXPENSE As permitted under SFAS No. 123, "Accounting for Stock-Based Compensation," the company provides quarterly and annual disclosures of the impact to earnings per share if stock options were expensed. The company estimates that if stock options were expensed in accordance with SFAS No. 123 for the full year 2005, the impact would be approximately $.07 per share. On December 15, 2004, the Financial Accounting Standards Board (FASB) issued Statement 123R, "Share-Based Payment," which now requires companies to measure compensation costs for all share-based payments (including employee stock options) at fair value. The deadline for adoption of Statement 123R is the first annual period beginning after June 15, 2005. The company has not yet quantified the impact of adoption of Statement 123R. The company intends to implement this standard in the first quarter 2006. *See accompanying notes for non-GAAP measures. (more) PAGE 6/DIEBOLD ANNOUNCES SECOND QUARTER RESULTS COMPANY TO FILE 10-Q/A AND 10-K/A As previously announced, the company identified a reconciliation issue in its North America sales commission accrual account. A detailed analysis of this reconciliation has been performed and the company has determined the commission account was under-accrued by $13.2 million at December 31, 2004 and $11.4 million at March 31, 2005. First quarter 2005 commission expense was overstated by $1.8 million. Commission expense in 2004 was understated by $0.3 million, with the first and second quarters of 2004 each understated by less than $0.1 million. Commission expense was understated by $2.7 million and $1.5 million in 2003 and 2002, respectively. The remaining $8.7 million understatement of commission expense was related to periods prior to fiscal year 2002. As a result, the company intends to file an amendment to its first quarter 2005 Form 10-Q and an amendment to its 2004 Form 10-K. All prior financial information presented in this release reflects the changes from the correction of the North America sales commission accrual account. OUTLOOK The following statements are based on current expectations. These statements are forward-looking and actual results may differ materially. These statements do not include the potential impact of any future mergers, acquisitions, disposals or other business combinations, or the effect of expensing stock options under the new accounting standard, SFAS Statement No. 123R "Share-Based Payment". RESTRUCTURING The company previously announced it anticipates full-year 2005 restructuring charges of $.15 to $.30, including the elimination of 300 full-time positions in North America and Western Europe, further global manufacturing realignment and facility consolidation and the consolidation of research and development operations and service functions. At the end of the second quarter, the company had reported year-to-date restructuring charges of approximately $.10 per share. These charges include realignment of the company's operations in Western Europe and North America. The company has identified a number of cost-reduction actions and now anticipates restructuring charges near the top end of the previously reported restructuring range, with charges of approximately $.20 identified for the remainder of 2005. These actions include: - Additional global manufacturing realignment and facility consolidation to speed production and reduce costs - Consolidation of research and development efforts to better serve key markets - Merging software operations and combining various service functions to better leverage resources and expertise throughout the company While the company will continue to realign operations, minimize operating costs and maximize existing resources, the planned elimination of the 300 full-time positions is nearly complete. (more) \ PAGE 7/DIEBOLD ANNOUNCES SECOND QUARTER RESULTS THIRD QUARTER 2005 OUTLOOK Expectations for the third quarter 2005 include: - Third quarter revenue is expected to increase 9 to 11 percent on a fixed exchange-rate basis*. - Financial self-service revenue growth of 7 to 9 percent*. - Security revenue growth of 10 to 12 percent*. - Election systems revenue is expected to be $35 to $45 million. - The company anticipates manufacturing start-up and restructuring total charges in the range of $.07 to $.10 per share related to the continued realignment of its operations. - Currency exchange is anticipated to impact revenue favorably by approximately 1.5 percent versus prior year. - Depreciation and amortization to be approximately $20 million. - An effective tax rate of approximately 32 percent. - An increase in pension expense of approximately $.01 per share versus prior year. - EPS in the range of $.72 to $.77 per share, including the anticipated manufacturing start-up costs and restructuring charges, and the one-time gain of approximately $.18 per share on the sale of the campus card systems business. Excluding manufacturing start-up costs and related issues as well as restructuring charges and the gain from the sale of the campus systems business, EPS is expected to be in the range of $.62 to $.67* per share. FULL-YEAR 2005 OUTLOOK Expectations for the full-year 2005 include: - Revenue growth of 10 to 12 percent, on a fixed exchange-rate basis*. - Financial self-service revenue growth of 6 to 8 percent*. - Security revenue growth of 17 to 19 percent*. - Election systems revenue is anticipated to be in the range of $115 to $125 million. - Brazilian lottery systems revenue of $10 to $20 million. - Currency expected to impact revenue favorably by approximately 1.2 percent versus prior year. - Depreciation and amortization in the range of $75 to $80 million. - An effective tax rate of approximately 32 percent. - Pension expense is expected to be $.03 per share higher in 2005, moving from $.05 per share in 2004 to $.08 per share in 2005. - Research and development expense will be approximately 2.5 percent of revenue, consistent with prior year. - EPS to be $2.60 to $2.70*. This range excludes restructuring charges of approximately $.30, manufacturing start-up costs and related issues of approximately $.04 per share, and the one-time gain of approximately $.18 per share on the sale of the campus card systems business. - Free cash flow* is expected to be in the range of $185 to $225 million. *See accompanying notes for non-GAAP measures. (more) PAGE 8/DIEBOLD ANNOUNCES SECOND QUARTER RESULTS NOTES FOR NON-GAAP MEASURES 1. Reconciliation of GAAP EPS to non-GAAP measures:
Q1 Q1 Q2 Q2 GUIDANCE Q3 2005 GUIDANCE FULL-YEAR 2005 2004 2005 2004 2005 ----- ----- ----- ----- ---------------- ----------------- EPS Continuing $0.37 $0.40 $0.46 $0.59 $0.72 $0.77 $2.42 $2.52 Operations EPS Discontinued 0.00 0.00 0.01 0.01 0.00 0.00 0.01 0.01 Operations Restatement of 0.01 0.00 0.00 0.00 0.00 0.00 0.01 0.01 Commission Expense Total EPS (GAAP) $0.38 $0.40 $0.47 $0.60 $0.72 $0.77 $2.44 $2.54 ----- ----- ----- ----- ----- ----- ----- ----- Gain on Sale of 0.00 0.00 0.00 0.00 (0.18) (0.18) (0.18) (0.18) Discontinued Operations Restructuring Charges 0.07 0.00 0.03 0.00 0.08 0.08 0.30 0.30 Other Special Items 0.00 0.00 0.04 0.00 0.00 0.00 0.04 0.04 Operating EPS $0.45 $0.40 $0.54 $0.60 $0.62 $0.67 $2.60 $2.70 (Non-GAAP) ===== ===== ===== ===== ===== ===== ===== =====
The company believes excluding these items provides meaningful insight into the ongoing performance of its operations. 2. Fixed exchange-rate is used to depict order and GAAP revenue growth in local currency without the benefit or detriment occurring from currency fluctuations. 3. Free cash flow/(use) is calculated as follows:
SIX MONTHS SIX MONTHS Q2 2005 Q2 2004 ENDED 2005 ENDED 2004 ------- ------- ---------- ---------- Net cash provided by operating activities $ (7,005) $ (7,653) $ 71,425 $ 8,401 (GAAP measure) Capital expenditures (16,112) (10,510) (29,824) (23,295) Rotable spares expenditures (1,060) (634) (7,382) (5,140) -------- -------- -------- -------- Free cash flow/(use) (non-GAAP measure) $(24,177) $(18,797) $ 34,219 $(20,034) ======== ======== ======== ========
The company believes that free cash flow is a meaningful indicator of cash generated for discretionary purposes. 4. Net (debt) is calculated as follows:
JUNE 30, DECEMBER 31, JUNE 30, 2005 2004 2004 --------- --------- --------- Cash, cash equivalents and other investments (GAAP measure) $ 178,358 $ 215,699 $ 123,579 Less Industrial development revenue bonds and other (13,500) (13,500) (13,550) Less Notes payable (307,107) (289,510) (277,164) --------- --------- --------- Net (debt) (non-GAAP measure) $(142,249) $ (87,311) $(167,135) ========= ========= =========
Given the significant cash, cash equivalents and other investments on the balance sheet, a meaningful debt calculation is to net cash against outstanding debt. (more) PAGE 9/DIEBOLD ANNOUNCES SECOND QUARTER RESULTS FINANCIAL INFORMATION Walden W. O'Dell and Senior Vice President and Chief Financial Officer Gregory T. Geswein will discuss the company's financial performance during a conference call today at 10:00 a.m. (ET). Access is available from Diebold's Web site at www.diebold.com. The replay can also be accessed on the site for up to three months after the call. FORWARD-LOOKING STATEMENTS In this press release, statements that are not reported, financial results or other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future performance. These forward-looking statements relate to, among other things, the company's future operating performance, the company's share of new and existing markets, the company's short- and long-term revenue and earnings growth rates and the company's implementation of cost-reduction initiatives. The use of the words "believes," "anticipates," "expects," "intends" and similar expressions is intended to identify forward-looking statements that have been made and may in the future be made by or on behalf of the company. Although the company believes that these forward-looking statements are based upon reasonable assumptions regarding, among other things, the economy, its knowledge of its business, and on key performance indicators that impact the company, these forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in or implied by the forward-looking statements. The company is not obligated to update forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Some of the risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements include, but are not limited to: - 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; - acceptance of the company's product and technology introductions in the marketplace; - unanticipated litigation, claims or assessments; - the company's ability to reduce costs and expenses and improve internal operating efficiencies; - variations in consumer demand for financial self-service technologies, products and services; - challenges raised about reliability and security of the company's election systems products, including the risk that such products will not be certified for use or will be decertified; - changes in laws regarding the company's election systems products and services; - potential security violations to the company's information technology systems; and - the company's ability to achieve benefits from its cost-reduction initiatives and other strategic changes. Diebold, Incorporated is a global leader in providing integrated self-service delivery and security systems and services. Diebold employs more than 14,000 associates with representation in nearly 90 countries worldwide and is headquartered in Canton, Ohio, USA. Diebold reported revenue of $2.4 billion in 2004 and is publicly traded on the New York Stock Exchange under the symbol `DBD.' For more information, visit the company's Web site at www.diebold.com. # # # PR/xxxx DIEBOLD, INCORPORATED CONDENSED CONSOLIDATED INCOME STATEMENTS (IN THOUSANDS EXCEPT EARNINGS PER SHARE)
THREE MONTHS ENDED JUNE 30 ---------------------------- RESTATED 2005 2004 --------- --------- Net Sales Product $ 307,974 $ 263,322 Service 321,249 282,407 --------- --------- Total 629,223 545,729 Cost of goods Product 223,589 170,140 Service 246,041 212,912 --------- --------- Total 469,630 383,052 Gross Profit 159,593 162,677 Percent of net sales 25.4% 29.8% Operating expenses Selling, general and administrative 90,224 83,013 Research, development and engineering 14,054 14,540 --------- --------- Total 104,278 97,553 Percent of net sales 16.6% 17.9% Operating profit 55,315 65,124 Percent of net sales 8.8% 11.9% Other expense and minority interest, net (7,571) (2,062) --------- --------- Income from continuing operations before taxes 47,744 63,062 Percent of net sales 7.6% 11.6% Taxes on income (15,266) (20,125) Effective tax rate 32.0% 31.9% Net Income from continuing operations $ 32,478 $ 42,937 --------- --------- Percent of net sales 5.2% 7.9% Discontinued operations Income from discontinued operations $ 1,228 $ 1,091 Taxes on income (408) (401) --------- --------- Net income from discontinued operations $ 820 $ 690 --------- --------- Net income $ 33,298 $ 43,627 ========= ========= Basic weighted average shares outstanding 71,031 72,176 Diluted weighted average shares outstanding 71,511 72,680 Basic Earnings Per Share from continuing operations $ 0.46 $ 0.59 Basic Earnings Per Share from discontinued operations 0.01 0.01 --------- --------- Total Basic Earnings Per Share $ 0.47 $ 0.60 Diluted Earnings Per Share from continuing operations $ 0.46 $ 0.59 Diluted Earnings Per Share from discontinued operations 0.01 0.01 --------- --------- Total Diluted Earnings Per Share $ 0.47 $ 0.60
DIEBOLD, INCORPORATED CONDENSED CONSOLIDATED INCOME STATEMENTS (IN THOUSANDS EXCEPT EARNINGS PER SHARE)
SIX MONTHS ENDED JUNE 30 -------------------------------- RESTATED 2005 2004 ----------- ----------- Net Sales Product $ 544,246 $ 480,619 Service 620,127 558,739 ----------- ----------- Total 1,164,373 1,039,358 Cost of goods Product 391,678 316,893 Service 474,234 421,267 ----------- ----------- Total 865,912 738,160 Gross Profit 298,461 301,198 Percent of net sales 25.6% 29.0% Operating expenses Selling, general and administrative 172,232 162,450 Research, development and engineering 28,319 29,769 ----------- ----------- Total 200,551 192,219 Percent of net sales 17.2% 18.5% Operating profit 97,910 108,979 Percent of net sales 8.4% 10.5% Other expense and minority interest, net (8,823) (2,996) ----------- ----------- Income from continuing operations before taxes 89,087 105,983 Percent of net sales 7.7% 10.2% Taxes on income (28,757) (33,821) Effective tax rate 32.3% 31.9% Net Income from continuing operations $ 60,330 $ 72,162 ----------- ----------- Percent of net sales 5.2% 6.9% Discontinued operations Income from discontinued operations $ 1,370 $ 990 Taxes on income (461) (403) ----------- ----------- Net income from discontinued operations $ 909 $ 587 ----------- ----------- Net income $ 61,239 $ 72,749 =========== =========== Basic weighted average shares outstanding 71,344 72,477 Diluted weighted average shares outstanding 71,874 73,026 Basic Earnings Per Share from continuing operations $ 0.85 $ 0.99 Basic Earnings Per Share from discontinued operations 0.01 0.01 ----------- ----------- Total Basic Earnings Per Share $ 0.86 $ 1.00 Diluted Earnings Per Share from continuing operations $ 0.84 $ 0.99 Diluted Earnings Per Share from discontinued operations 0.01 0.01 ----------- ----------- Total Diluted Earnings Per Share $ 0.85 $ 1.00
DIEBOLD, INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
RESTATED JUNE 30, 2005 DECEMBER 31, 2004 ------------- ----------------- ASSETS Current assets Cash and cash equivalents $ 143,172 $ 184,045 Short-term investments 35,186 31,654 Trade receivables, net 576,835 583,658 Inventories 344,431 322,293 Other current assets 135,876 112,982 ---------- ---------- Total current assets 1,235,500 1,234,632 Securities and other investments 49,730 52,248 Property, plant and equipment, net 281,283 268,090 Goodwill 400,852 412,625 Other assets 193,738 167,957 ---------- ---------- $2,161,103 $2,135,552 ---------- ---------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable $ 31,906 $ 289,510 Accounts payable 127,310 140,324 Other current liabilities 359,762 310,356 ---------- ---------- Total current liabilities 518,978 740,190 Long-term notes payable 275,201 -- Long-term liabilities 150,606 146,454 Total shareholders' equity 1,216,318 1,248,908 ---------- ---------- $2,161,103 $2,135,552 ---------- ----------
DIEBOLD, INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
SIX MONTHS ENDED ------------------------------- RESTATED JUNE 30, 2005 JUNE 30, 2004 ------------- ------------- Cash Flow from operating activities: Net Income from continuing operations $ 60,330 $ 72,162 Adjustments to reconcile net income to cash provided by operating activities: Net income from discontinued operations 909 587 Depreciation and amortization 39,699 33,359 Deferred income taxes 3,907 (365) Loss on sale of assets, net 378 46 Minority share of income 2,463 2,584 Cash provided (used) by changes in certain assets and liabilities: Trade receivables 11,323 (22,050) Inventories (24,428) (60,360) Accounts payable (14,948) (12,952) Certain other assets and liabilities (8,208) (4,610) --------- --------- Net cash provided by operating activities 71,425 8,401 Cash flow from investing activities: Payments for acquisitions, net of cash acquired (18,241) (35,429) Net investment activity 4,656 2,809 Capital expenditures (29,824) (23,295) Rotable spares expenditures (7,382) (5,140) Increase in certain other assets (13,590) (10,054) --------- --------- Net cash used by investing activities (64,381) (71,109) Cash flow from financing activities: Dividends paid (29,171) (26,807) Net (payments) borrowings on short term borrowings 36,796 94,405 Repurchase treasury shares (56,031) (53,432) Other financing activities 2,926 3,744 --------- --------- Net cash (used)/provided by financing activities (45,480) 17,910 Effect of exchange rate changes on cash (2,437) (1,848) --------- --------- Decrease in cash and cash equivalents (40,873) (46,646) Cash and cash equivalents at the beginning of the period 184,045 169,951 --------- --------- Cash and cash equivalents at the end of the period $ 143,172 $ 123,305 ========= =========