EX-99.1 2 l34274aexv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
(DIEBOLD LOGO)
pressrelease
     
Media contact:
  Investor contact:
Mike Jacobsen
  Chris Bast
+1 330 490 3796
  +1 330 490 6908
michael.jacobsen@diebold.com
  christopher.bast@diebold.com
 
FOR IMMEDIATE RELEASE:
    
October 30, 2008
    
DIEBOLD REPORTS 2008 THIRD QUARTER FINANCIAL RESULTS
Third quarter net income of $46.5 million up 65.2 percent from 2007
•   Continued significant improvement in operating profitability and earnings
 
•   Strong order growth and backlog, despite market challenges
 
•   Quarterly cash from operating activities improved $80.7 million from the third quarter 2007
NORTH CANTON, Ohio – Diebold, Incorporated (NYSE: DBD) today reported 2008 third quarter revenue of $890.3 million, an increase of 20.2 percent from the third quarter of 2007. The company also reported net income of $46.5 million during the third quarter of 2008, compared to net income of $28.1 million in the comparable period in 2007, an increase of 65.2 percent. Earnings for the third quarter of 2008 were $.70 per share, compared to $.42 per share in the third quarter of 2007, an increase of 66.7 percent.
The third quarter 2008 results included restructuring charges of $.17 per share, compared to $.01 per share in the third quarter of 2007. These restructuring charges related primarily to severance and reorganization costs from the previously announced reduction in the company’s global workforce. In addition, the company also incurred $.29 per share in non-routine expenses in the third quarter 2008, compared to $.04 per share in the third quarter 2007. These non-routine expenses primarily consisted of legal, audit and consultation fees related to the completion of the internal review of other accounting items, the restatement of financial statements and the ongoing Securities and Exchange Commission (SEC) and U.S. Department of Justice (DOJ) investigations, as well as other advisory fees. Of the $.29 per share in non-routine expenses in the third quarter of 2008, $.16 per share was related to a fee owed to financial advisor Goldman Sachs as a result of the withdrawal of the unsolicited takeover bid from United Technologies Corp. Excluding these restructuring charges and non-routine expenses, diluted earnings per share in the third quarter of 2008 would have been $1.16 versus $.47 in the third quarter 2007*, an increase of 146.8 percent.
Cash from operating activities in the third quarter of 2008 was $56.3 million, compared to a cash use from operating activities of $24.4 million in the third quarter of 2007. Free cash flow during the third quarter of 2008 was $43.4 million, compared to free cash use of $34.7 million during the third quarter of 2007*.
Management commentary
“I am very pleased with the strong results we generated in the third quarter. We continue to make solid progress on our key initiatives to reduce costs and improve profitability, and this is reflected in our results,” said Thomas W. Swidarski, Diebold president and chief executive officer. “While the quarter was very strong, it benefited from 2008 Brazilian election revenue, a business opportunity which historically occurs every other year.
 
*   See accompanying notes for non-GAAP measures.
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PAGE 2/ DIEBOLD REPORTS 2008 THIRD QUARTER FINANCIAL RESULTS
“Also, we benefited from a large order in China, in which revenue was expected to be recognized during the fourth quarter but occurred during the third quarter due to customer acceptance occurring sooner than planned. Including this order, we anticipate revenue in China will increase more than 20 percent in the full-year 2008.
“In addition to the unique events that occurred during the quarter, we executed our business plans very effectively. As a result of our strong performance, we are again raising our full-year earnings guidance,” Swidarski continued. “While this guidance reflects an exceptional year, it does result in fourth-quarter earnings expectations that are lower than what we historically realize. As we have communicated in prior quarters, our typical earnings seasonality has been affected by purchases in China coming early in the year in 2008, rather than being concentrated in the fourth quarter. We anticipate our more historical earnings seasonality returning in 2009. “
Swidarski concluded, “Clearly, since our last earnings announcement on August 11, we have witnessed unprecedented change in the financial services industry – both in the United States and internationally. In the United States, the Federal Government’s Troubled Asset Recovery Program is reshaping the financial landscape almost daily. While our orders and backlog remain very strong, these day-to-day changes in our core industry make it difficult to assess the impact on 2009 financial results. Given this uncertainty, we are further accelerating our efforts to reduce costs, increase operational efficiencies and improve productivity. We expect to be in a better position to provide insight to 2009 financial expectations in our year-end earnings announcement.”
Third Quarter Orders (constant currency)
Total product and services orders for financial self-service and security were up into the low double-digit range compared to the prior-year period. Financial self-service orders increased in excess of 20 percent, with double-digit growth in each of the geographic regions. Security orders, however, decreased in the low double-digit range as new bank branch construction and retail store openings remain weak in the United States.
Revenue
Total revenue for the 2008 third quarter was up 20.2 percent. Financial self-service products and services revenue increased 18.3 percent over the prior period, while total security revenue decreased 6.4 percent. During the quarter, election systems revenue in Brazil was $58.6 million, representing more than 85 percent of the increase in total election systems revenue. Of the 20.2 percent increase in total revenue, the net positive currency impact was 3.4 percentage points.
Gross Margin
Total gross margin for the quarter was 26.2 percent, compared to 23.9 percent in the third quarter of 2007. These gross margins included restructuring charges of $10.7 million in the third quarter of 2008 and $1.0 million in the third quarter of 2007.
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PAGE 3/ DIEBOLD REPORTS 2008 THIRD QUARTER FINANCIAL RESULTS
Product gross margin was 27.9 percent in the quarter, compared to 26.5 percent in the third quarter 2007. Included in product gross margins were restructuring charges of $8.4 million in the third quarter of 2008 and $0.8 million in the third quarter of 2007. Despite the higher restructuring charges, product gross margin improved during the period. The gross profit associated with the Brazil voting business positively impacted product gross margin in the quarter by 2.2 percentage points. In addition, gross profit margin was negatively impacted by higher restructuring expenses, increased commodity costs, unfavorable security product revenue mix and lower overall volume in the security business. This negative impact was partially offset by the company’s ongoing cost-reduction efforts and a higher mix of revenue from China. The China revenue included the large order in which revenue was expected to be recognized during the fourth quarter but occurred during the third quarter.
Service gross margin in the quarter was 24.4 percent, compared to 21.4 percent in the third quarter of 2007. Included in service gross margins were restructuring charges of $2.3 million in the third quarter of 2008 and $0.2 million in the third quarter of 2007. The year-over-year improvement in service margin was driven by better product quality, improved international margins as a result of previous restructuring actions, and continued gains in productivity and efficiency, partially offset by higher restructuring charges.
Operating Expense
Operating expenses as a percentage of revenue in the third quarter of 2008 were 18.9 percent, compared to 18.4 percent in the third quarter of 2007. Included in the third quarter 2008 operating expenses were restructuring charges of $3.8 million and non-routine expenses of $24.7 million. This compares to $0.2 million in restructuring charges and $3.3 million in non-routine expenses in the third quarter of 2007. The third quarter 2008 non-routine expenses included a $13.5 million fee owed to financial advisor Goldman Sachs as a result of the withdrawal of the unsolicited takeover bid from United Technologies Corp.
Net Income
The company reported net income of $46.5 million in the third quarter 2008, or 5.2 percent of revenue, compared to net income of $28.1 million in the third quarter 2007, or 3.8 percent of revenue. The increase in net income was a result of higher gross profits and a lower effective tax rate, partially offset by higher operating expense levels. The third quarter 2008 effective tax rate was positively affected by a $3.7 million discrete benefit related to a China technology tax credit.
On a net of tax basis, the fee to Goldman Sachs adversely impacted net income by $10.6 million, while restructuring charges adversely impacted net income by $11.4 million in the third quarter of 2008 and by $0.9 million in the third quarter of 2007. Finally, other non-routine expenses, net of tax, were $8.8 million in the third quarter of 2008 and $2.4 million in the third quarter of 2007.
Net Debt and Cash Flow
The company’s net debt* was $378.4 million at September 30, 2008 compared to $389.9 million at September 30, 2007, a decrease of $11.5 million over the last 12 months.
 
*   See accompanying notes for non-GAAP measures.
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PAGE 4/ DIEBOLD REPORTS 2008 THIRD QUARTER FINANCIAL RESULTS
Net cash provided by operating activities increased $24.0 million, moving from $37.8 million in the nine months ended September 30, 2007 to $61.8 million in the nine months ended September 30, 2008. The primary reason for this increase was higher net income and a net increase in certain other assets/liabilities, partially offset by an increase in trade receivable balances. The net increase in certain other assets/liabilities was primarily due to collection of refundable income taxes, increases in the accruals for non-routine expenses, and increases in warranty reserves and VAT taxes as a result of increased product revenue. The increase in trade receivables was due to significantly higher revenue levels. Days sales outstanding (DSO) was 52 days at September 30, 2008 compared to 61 days at September 30, 2007, while inventory turns moved to 4.2 turns at September 30, 2008 from 3.7 turns at September 30, 2007. As a result of the change in net cash provided by operating activities, free cash flow increased by $25.7 million, moving to $29.2 million at September 30, 2008 from $3.5 million at September 30, 2007 *.
Restructuring charges
The company incurred third quarter 2008 restructuring charges totaling $14.5 million, or $.17 per share. These charges were primarily related to severance costs from the previously announced ongoing reduction in the company’s global workforce, which is on track to be completed by the end of 2008. Cash payments related to restructuring in the third quarter of 2008 were $6.0 million. Taking into consideration the previously announced manufacturing and supply chain restructuring and the global workforce reduction, Diebold expects full-year restructuring charges to be in the range of $40 million to $45 million, or $.50 per share to $.56 per share. While the majority of the anticipated 2008 restructuring charges are ultimately expected to result in cash payments, the company cannot currently predict the timing of these payments.
Non-routine expenses
The company incurred third quarter 2008 non-routine expenses totaling $24.7 million, or $.29 per share, compared to $3.3 million, or $.04 per share in the third quarter of 2007. These expenses primarily consisted of legal, audit and consultation fees related to the previously announced internal review of other accounting items, restatement of financial statements and the ongoing government investigations, as well as other advisory fees. Diebold estimates these non-routine expenses for the full year will be in the range of $45 million to $47 million, or $.53 per share to $.55 per share. Cash payments related to these non-routine expenses in the third quarter of 2008 were $8.2 million, compared to $0.8 million in the third quarter of 2007.
Full-year 2008 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.
 
*   See accompanying notes for non-GAAP measures.
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PAGE 5/ DIEBOLD REPORTS 2008 THIRD QUARTER FINANCIAL RESULTS
Expectations for the full year 2008 include:
•   Revenue
         
    Previous guidance (provided    
Revenue growth   August 11, 2008)   Current guidance
Total revenue
   8 to 10 percent   8 to 10 percent
Financial self-service
   9 to 10 percent   9 to 10 percent
Security
   1 to 3 percent   Flat
Election systems
   $120 million to $130 million   $135 million to $140 million
(including Brazil)
   (with approximately half   (with approximately half
 
   coming from Brazil)   coming from Brazil)
Brazilian lottery
   $10 million to $13 million   $10 million to $13 million
•   Earnings per share
         
    Previous guidance    
    (provided Sept. 30, 2008)   Current guidance
2008 EPS (GAAP)
   $1.62 - $1.52   $1.45 - $1.42 (a)
Restructuring charges
   $.45 - $.56   $.50 - $.56
Non-routine expenses
   $.28 - $.32   $.53 - $.55
Impairment
   $.05   $.05
2008 EPS non-GAAP
   $2.40 - $2.45   $2.53 - $2.58
 
(a)   — Included in the revised full-year earnings guidance is a potential inventory valuation adjustment in the fourth quarter of approximately $.10 to $.15 per share primarily related to select voting equipment within Premier Election Systems. This inventory may require a reduction in value, contingent upon order volumes received in the fourth quarter.
Conference call
Thomas W. Swidarski and Kevin J. Krakora 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.
 
*   See accompanying notes for non-GAAP measures.
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PAGE 6/ DIEBOLD REPORTS 2008 THIRD QUARTER FINANCIAL RESULTS
Revenue Summary by Product, Service and Geographic Area
(In Thousands — Quarter Ended September 30)
                                                 
    Q3 2008     Q3 2007     % Change     YTD 9/30/2008     YTD 9/30/2007     % Change  
Financial Self-Service
                                                
Products
   $ 324,414     $ 270,509       19.9 %   $ 812,732     $ 720,823       12.8 %
Services
     290,225       249,227       16.5 %     844,769       733,361       15.2 %
 
                                    
Total Fin. self-service
     614,639       519,736       18.3 %     1,657,501       1,454,184       14.0 %
 
                                                
Security solutions
                                                
Products
     78,755       86,509       -9.0 %     227,890       238,158       -4.3 %
Services
     120,116       125,941       -4.6 %     352,202       350,789       0.4 %
 
                                    
Total Security
     198,871       212,450       -6.4 %     580,092       588,947       -1.5 %
 
 
                                    
Total Fin. self-service & security
     813,510       732,186       11.1 %     2,237,593       2,043,131       9.5 %
 
                                                
Election systems
                                                
Products
     69,326       2,954       2246.9 %     92,199       19,648       369.3 %
Services
     6,698       5,713       17.2 %     25,648       19,545       31.2 %
 
                                    
Total Election systems
     76,024       8,667       777.2 %     117,847       39,193       200.7 %
 
                                                
Brazilian lottery systems
     756       —       n/a       4,047       —       n/a  
 
                                                
 
                                    
Total Revenue
   $ 890,290     $ 740,853       20.2 %   $ 2,359,487     $ 2,082,324       13.3 %
 
                                    
Revenue Summary by Geographic Segment
                                                 
    Q3 2008     Q3 2007     % Change     YTD 9/30/2008     YTD 9/30/2007     % Change  
The Americas
     642,990       525,600       22.3 %     1,692,514       1,503,814       12.5 %
Asia Pacific
     123,442       79,899       54.5 %     316,923       220,465       43.8 %
Europe, Middle East, Africa
     123,858       135,354       -8.5 %     350,050       358,045       -2.2 %
 
 
                                    
Total Revenue
   $ 890,290     $ 740,853       20.2 %   $ 2,359,487     $ 2,082,324       13.3 %
 
                                    
Notes for Non-GAAP Measures
  1.   Reconciliation of GAAP EPS to non-GAAP measures:
                                 
    Q3 2008     Q3 2007     YTD 9/30/08     YTD 9/30/07  
Total EPS (GAAP measure)
   $ 0.70     $ 0.42     $ 1.32     $ 0.74  
Restructuring Charges
     0.17       0.01       0.37       0.21  
Non-routine expenses
     0.29       0.04       0.49       0.05  
Impairment
     0.00       0.00       0.05       0.00  
 
                        
Total EPS (non-GAAP measure)
   $ 1.16     $ 0.47     $ 2.23     $ 1.00  
 
                        
      The company’s management believes excluding restructuring charges, non-routine expenses and impairment is useful to investors because it provides an overall understanding of the company’s historical financial performance and future prospects. Management believes operating EPS (non-GAAP) is an indication of the company’s base-line performance before gains, losses or other charges that are considered by management to be outside the company’s core operating results. Exclusion of these items permits evaluation and comparison of results for the company’s core business operations, and it is on this basis that management internally assesses the company’s performance.

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PAGE 7/ DIEBOLD REPORTS 2008 THIRD QUARTER FINANCIAL RESULTS
  2.   Free cash flow/(use) is calculated as follows:
                                 
    Q3 2008     Q3 2007     YTD 9/30/08     YTD 9/30/07  
Net cash provided (used) by operating activities (GAAP measure)
   $ 56,297     $ (24,432 )   $ 61,846     $ 37,848  
Capital expenditures
     (12,859 )     (10,296 )     (32,637 )     (34,323 )
 
                        
Free cash flow (use) (non-GAAP measure)
   $ 43,438     $ (34,728 )   $ 29,209     $ 3,525  
 
                        
      The company’s management believes that free cash flow is useful to investors because it is a meaningful indicator of cash generated from operating activities that is available for the execution of its business strategy, including service of debt principal, dividends, share repurchase and acquisitions. Free cash flow is not an indicator of residual cash available for discretionary spending, because it does not take into account mandatory debt service or other non-discretionary spending requirements that are deducted in the calculation of free cash flow.
  3.   Net (debt) is calculated as follows:
                         
    September 30, 2008     December 31, 2007     September 30, 2007  
Cash, cash equivalents and other investments (GAAP measure)
   $ 330,251     $ 311,310     $ 233,604  
Less Industrial development revenue bonds and other
     (11,900 )     (11,950 )     (11,950 )
Less Notes payable
     (696,702 )     (624,071 )     (611,508 )
 
                  
Net (debt) (non-GAAP measure)
   $ (378,351 )   $ (324,711 )   $ (389,854 )
 
                  
      The company’s management believes that given the net debt, the significant cash, cash equivalents and other investments on its balance sheet, that net cash against outstanding debt is a meaningful debt calculation.
  4.   Reconciliation of GAAP Operating Margin to non-GAAP measures
                                 
    Q3 2008   Q3 2007   YTD 9/30/08   YTD 9/30/07
GAAP Operating Margin
   $ 65,531     $ 40,619     $ 132,764     $ 81,658  
GAAP Operating Margin %
     7.4 %     5.5 %     5.6 %     3.9 %
Restructuring
   $ 14,483     $ 1,219     $ 29,560     $ 19,037  
Non-routine Expenses
   $ 24,665     $ 3,323     $ 41,840     $ 4,212  
Impairment
   $ —     $ —     $ 4,376     $ —  
Non GAAP Operating Margin
   $ 104,679     $ 45,161     $ 208,540     $ 104,907  
Non GAAP Operating Margin %
     11.8 %     6.1 %     8.8 %     5.0 %
      The company’s management believes excluding restructuring charges, non-routine expenses and impairment from operating margins is an indication of the company’s baseline performance before gains, losses, or other charges that are considered by management to be outside the company’s core operating results. The exclusion of these items permits evaluation and comparison of results for the company’s core business operations and it is on this basis that the company’s management internally assesses the company’s performance.
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 and measures to improve pricing, including the optimization of the company’s manufacturing capacity. The use of the words “will,” “believes,” “anticipates,” “expects,” “intends” and similar expressions is intended to identify forward-
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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:
•   the results of the SEC and DOJ investigations;
•   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;
•   the effects of the sub-prime mortgage crisis and the disruptions 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;
•   acceptance of the company’s product and technology introductions in the marketplace;
•   the amount of cash and non-cash charges in connection with the planned closure of the company’s Newark, Ohio facility;
•   unanticipated litigation, claims or assessments;
•   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;
•   the company’s ability to successfully execute its strategy related to the election systems business; and
•   the company’s ability to achieve benefits from its cost-reduction initiatives and other strategic changes.
About Diebold
Diebold, Incorporated is a global leader in providing integrated self-service delivery and security systems and services. Diebold employs more than 17,000 associates with representation in nearly 90 countries worldwide and is headquartered in Canton, Ohio, USA. Diebold 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.
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PR/xxxx

 

 

DIEBOLD, INCORPORATED
CONDENSED CONSOLIDATED INCOME STATEMENTS — UNAUDITED
(IN THOUSANDS EXCEPT EARNINGS PER SHARE)
                                 
    Three months ended     Nine months ended  
    September 30,     September 30,  
    2008     2007     2008     2007  
Net Sales
                                
Product
   $ 473,251     $ 359,972     $ 1,136,868     $ 978,629  
Service
     417,039       380,881       1,222,619       1,103,695  
 
                        
Total
     890,290       740,853       2,359,487       2,082,324  
Cost of goods
                                
Product
     341,306       264,494       821,261       732,982  
Service
     315,343       299,300       937,069       878,408  
 
                        
Total
     656,649       563,794       1,758,330       1,611,390  
Gross Profit
     233,641       177,059       601,157       470,934  
Percent of net sales
     26.2 %     23.9 %     25.5 %     22.6 %
Operating expenses
                                
Selling, general and administrative
     147,774       117,532       405,774       342,568  
Research, development and engineering
     20,364       18,894       58,275       53,115  
Impairment of Assets
     —       —       4,376       —  
(Gain) Loss on sale of Assets
     (28 )     14       (32 )     (6,407 )
 
                        
Total
     168,110       136,440       468,393       389,276  
Percent of net sales
     18.9 %     18.4 %     19.9 %     18.7 %
Operating profit
     65,531       40,619       132,764       81,658  
Percent of net sales
     7.4 %     5.5 %     5.6 %     3.9 %
Other expense and minority interest, net
     (9,233 )     (6,223 )     (20,278 )     (11,183 )
 
                        
Income before taxes
     56,298       34,396       112,486       70,475  
Percent of net sales
     6.3 %     4.6 %     4.8 %     3.4 %
Taxes on income
     (9,782 )     (6,247 )     (24,961 )     (20,874 )
Effective tax rate
     17.4 %     18.2 %     22.2 %     29.6 %
Net income
   $ 46,516     $ 28,149     $ 87,525     $ 49,601  
 
                        
 
                                
Basic weighted average shares outstanding
     66,101       65,926       66,073       65,798  
Diluted weighted average shares outstanding
     66,758       66,985       66,459       66,720  
 
                                
Basic Earnings Per Share
   $ 0.70     $ 0.43     $ 1.32     $ 0.75  
 
                                
Diluted Earnings Per Share
   $ 0.70     $ 0.42     $ 1.32     $ 0.74  

 

 

DIEBOLD, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED
(IN THOUSANDS)
                 
    September 30,     December 31,  
    2008     2007  
ASSETS
                
Current assets
                
Cash and cash equivalents
   $ 212,784     $ 206,334  
Short-term investments
     117,467       104,976  
Trade receivables, net
     591,162       544,501  
Inventories
     571,684       533,619  
Other current assets
     273,780       241,102  
 
            
Total current assets
     1,766,877       1,630,532  
 
Securities and other investments
     80,618       75,227  
Property, plant and equipment, net
     205,811       220,056  
Goodwill
     449,596       465,484  
Other assets
     235,936       239,827  
 
            
 
   $ 2,738,838     $ 2,631,126  
 
            
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current liabilities
                
Notes payable
   $ 12,743     $ 14,807  
Accounts payable
     197,008       170,632  
Other current liabilities
     565,832       565,199  
 
            
Total current liabilities
     775,583       750,638  
 
                
Long-term notes payable
     683,959       609,264  
Long-term liabilities
     159,684       156,390  
Total shareholders’ equity
     1,119,612       1,114,834  
 
            
 
   $ 2,738,838     $ 2,631,126  
 
            

 

 

DIEBOLD, INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
(IN THOUSANDS)
                 
    Nine months ended September 30,  
    2008     2007  
Cash flow from operating activities:
                
Net income
   $ 87,525     $ 49,601  
Adjustments to reconcile net income to cashprovided by operating activities:
               
Minority share of income
     6,800       5,579  
Depreciation and amortization
     61,211       53,366  
Share-based compensation
     9,166       10,945  
Excess tax benefits from share-based compensation
     —       (867 )
Deferred income taxes
     610       14,892  
Impairment of asset
     4,376       —  
Gain on sale of assets, net
     (32 )     (6,407 )
Cash provided (used) by changes in certain assets and liabilities:
                
Trade receivables
     (67,311 )     92,589  
Inventories
     (53,161 )     (48,164 )
Prepaid expenses
     (6,297 )     (12,686 )
Other current assets
     (24,403 )     (11,134 )
Accounts payable
     29,748       18,085  
Deferred revenue
     (61,057 )     (51,500 )
Certain other assets and liabilities
     74,671       (76,451 )
 
            
 
Net cash provided by operating activities
     61,846       37,848  
 
                
Cash flow from investing activities:
                
Payments for acquisitions, net of cash acquired
     (3,733 )     (10,028 )
Net investment activity
     (30,874 )     22,921  
Proceeds from sale of fixed assets
     29       7,594  
Capital expenditures
     (32,637 )     (34,323 )
Increase in certain other assets
     (17,035 )     (22,725 )
 
            
 
Net cash used by investing activities
     (84,250 )     (36,561 )
 
                
Cash flow from financing activities:
                
Dividends paid
     (49,917 )     (46,820 )
Net borrowings
     74,522       (73,294 )
Distribution of affiliates’ earnings to minority interest holder
     —       (15,440 )
Excess tax benefits from share-based compensation
     —       867  
Issuance of common shares
     —       8,323  
 
            
 
Net cash provided (used) in financing activities
     24,605       (126,364 )
 
                
Effect of exchange rate changes on cash
     4,249       12,859  
 
            
 
                
Increase (Decrease) in cash and cash equivalents
     6,450       (112,218 )
Cash and cash equivalents at the beginning of the period
     206,334       253,968  
 
            
Cash and cash equivalents at the end of the period
   $ 212,784     $ 141,750