-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DAGZBhPJ0wr0pnnZngPltmrDElbXCZDJhY+KJV1gw4cnd9TTdRQSVZTct+3BWu// y/8krKrRh4j9aQWQxB4n3A== 0000950152-96-005474.txt : 19961030 0000950152-96-005474.hdr.sgml : 19961030 ACCESSION NUMBER: 0000950152-96-005474 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961029 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIEBOLD INC CENTRAL INDEX KEY: 0000028823 STANDARD INDUSTRIAL CLASSIFICATION: CALCULATING & ACCOUNTING MACHINES (NO ELECTRONIC COMPUTERS) [3578] IRS NUMBER: 340183970 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04879 FILM NUMBER: 96649184 BUSINESS ADDRESS: STREET 1: P.O. BOX 8230 CITY: CANTON STATE: OH ZIP: 44711-8230 BUSINESS PHONE: 2164894000 MAIL ADDRESS: STREET 1: PO BOX 8230 CITY: CANTON STATE: OH ZIP: 44711-8230 10-Q 1 DIEBOLD, INCORPORATED 10-Q 1 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 - -------------------------------------------------------------------------------- FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from .......... to .......... Commission file number 1-4879 DIEBOLD, INCORPORATED ------------------------------------------------------ (Exact name of registrant as specified in its charter) Ohio 34-0183970 - -------------------------------------------------------------- ------------------------------------ (State or other jurisdiction of incorporation or organization) (IRS Employer Identification Number) 5995 Mayfair Road, P.O. Box 3077, North Canton, Ohio 44720-8077 - -------------------------------------------------------------- ------------------------------------ (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (330) 489-4000 - -------------------------------------------------------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of Common Shares, as of the latest practicable date.
Class Outstanding at October 25, 1996 ----- --------------------------------- Common Shares $1.25 Par Value 45,888,703 Shares - ------------------------------ ----------
-1- 2 DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q INDEX
Page No. -------- PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Condensed Consolidated Balance Sheets - September 30, 1996 and December 31, 1995 3 Condensed Consolidated Statements of Income - Three Months and Nine Months Ended September 30, 1996 and 1995 4 Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 1996 and 1995 5 Notes to Condensed Consolidated Financial Statements 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 8 SIGNATURES 10 INDEX TO EXHIBITS 11
-2- 3 DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q PART I - FINANCIAL INFORMATION ITEM 1. - FINANCIAL STATEMENTS CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------- (Dollars in thousands except per share amounts)
(Unaudited) September 30, December 31, 1996 1995 ------------- ------------ ASSETS ------ Current assets Cash and cash equivalents $ 26,160 $ 15,698 Short-term investments 45,600 30,989 Trade receivables 242,088 197,145 Inventories 99,295 91,002 Prepaid expenses and other current assets 50,333 41,378 --------- --------- Total current assets 463,476 376,212 Securities and other investments 137,226 146,741 Property, plant and equipment, at cost 193,980 177,573 Less accumulated depreciation and amortization 103,345 93,501 --------- --------- 90,635 84,072 Lease receivables 50,620 44,614 Other assets 94,472 98,156 --------- --------- $ 836,429 $ 749,795 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current liabilities Accounts payable and other current liabilities $ 153,749 $ 127,874 Deferred income 69,594 62,687 --------- --------- Total current liabilities 223,343 190,561 Pensions 19,913 17,523 Postretirement benefits 21,818 21,739 Minority interest 17,499 13,775 Shareholders' equity Preferred Shares, no par value, authorized 1,000,000 shares, none issued Common Shares, par value $1.25, authorized 125,000,000 shares, issued 46,038,294 and 45,893,678 shares, respectively; outstanding 45,881,609 and 45,808,227, respectively 57,548 57,367 Additional capital 56,596 50,937 Retained earnings 458,181 412,432 Treasury shares, at cost (156,685 and 85,451 shares, respectively) (7,170) (3,849) Other (11,299) (10,690) --------- --------- Total shareholders' equity 553,856 506,197 --------- --------- $ 836,429 $ 749,795 ========= =========
See accompanying notes to condensed consolidated financial statements. -3- 4 DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q CONDENSED CONSOLIDATED STATEMENTS OF INCOME ------------------------------------------- (Unaudited) (In thousands except per share amounts)
Three Months Ended Nine Months Ended ---------------------- ---------------------- September 30, September 30, ---------------------- ---------------------- 1996 1995 1996 1995 --------- --------- --------- --------- Net sales Products $ 184,220 $ 138,720 $ 483,800 $ 392,063 Services 87,576 77,280 252,219 227,884 --------- --------- --------- --------- 271,796 216,000 736,019 619,947 Cost of sales Products 114,846 85,972 297,707 245,013 Services 62,564 55,738 182,369 163,152 --------- --------- --------- --------- 177,410 141,710 480,076 408,165 --------- --------- --------- --------- Gross profit 94,386 74,290 255,943 211,782 Selling and administrative expense 41,254 34,535 118,401 102,964 Research, development and engineering expense 11,781 11,170 36,752 31,316 --------- --------- --------- --------- 53,035 45,705 155,153 134,280 --------- --------- --------- --------- Operating profit 41,351 28,585 100,790 77,502 Investment income 4,274 5,101 13,435 11,412 Miscellaneous, net (3,461) (2,951) (7,296) (6,593) Minority interest (2,056) (77) (2,966) (715) --------- --------- --------- --------- Income before taxes 40,108 30,658 103,963 81,606 Taxes on income 13,435 10,115 34,823 26,930 --------- --------- --------- --------- Net income $ 26,673 $ 20,543 $ 69,140 $ 54,676 ========= ========= ========= ========= Weighted average number of Common Shares outstanding 45,870 45,780 45,856 45,753 Net income per Common Share $ 0.58 $ 0.45 $ 1.51 1.20 ========= ========= ========= ========= Cash dividends paid per Common Share $ 0.17 $ 0.16 $ 0.51 $ 0.48 ========= ========= ========= =========
See accompanying notes to condensed consolidated financial statements. -4- 5 DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- (Unaudited) (Dollars in thousands)
Nine Months Ended September 30, 1996 1995 -------- -------- Cash flow from operating activities: Net income $ 69,140 $ 54,676 Adjustments to reconcile net income to cash provided by operating activities: Minority share of income 2,966 715 Depreciation and amortization 13,051 10,289 Other charges and amortization 10,448 12,305 Cash used by changes in certain current assets and liabilities (44,091) (17,077) Changes in deferred income 6,907 9,681 Other 7,734 (4,996) -------- -------- Total adjustments (2,985) 10,917 -------- -------- Net cash provided by operating activities 66,155 65,593 Cash flow from investing activities: Proceeds from maturities of investments 43,274 67,019 Payments for purchases of investments (54,040) (53,193) Capital expenditures (20,104) (25,419) Increase in certain other assets (3,226) (6,692) -------- -------- Net cash used by investing activities (34,096) (18,285) Cash flow from financing activities: Dividends paid (23,391) (21,963) Proceeds from issuance of Common Shares 1,036 1,554 Other 758 (1,454) -------- -------- Net cash used by financing activities (21,597) (21,863) -------- -------- Increase in cash and cash equivalents 10,462 25,445 Cash and cash equivalents at the beginning of the period 15,698 17,285 -------- -------- Cash and cash equivalents at the end of the period $ 26,160 $ 42,730 ======== ========
See accompanying notes to condensed consolidated financial statements. -5- 6 DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------------- (Unaudited) (Dollars in thousands) 1. The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of Management, necessary for a fair statement of the results for the interim periods. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto together with management's discussion and analysis of financial condition and results of operations contained in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. The results of operations for the nine month period ended September 30, 1996 are not necessarily indicative of results to be expected for the full year. 2. The Net income per Common Share computations in the condensed consolidated statements of income are based on the weighted average number of shares outstanding during each period reported.
3. Inventory detail at: September 30, 1996 December 31, 1995 ------------------ ----------------- Finished goods and service parts $ 34,785 $ 22,683 Work in process 64,364 68,209 Raw materials 146 110 -------- -------- Total inventory $ 99,295 $ 91,002 ======== ========
4. The Company has reclassified the presentation of certain prior-year information to conform with the current presentation format. -6- 7 DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 1O-Q ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS As of September 30, 1996 (Unaudited/Dollars in thousands except for per share data) Changes in Financial Condition - ------------------------------ The balance sheet of the Company continued to reflect a strong financial position at September 30, 1996. Cash, cash equivalents and short-term investments increased to $71,760 at September 30, 1996 compared to $46,687 at December 31, 1995. These assets along with securities and other investments accounted for 25% and 26% of total assets at September 30, 1996 and December 31, 1995, respectively. Securities and other investments consist principally of tax-free municipal bonds, preferred stock, and other investments. Future capital expenditures and increases in working capital are expected to be financed through internally generated funds. The Company's investment portfolio is available for any funding needs if required. External financing is also available if needed through the Company's lines of credit. At September 30, 1996, the Company had unused lines of credit approximating $40,000 and the Company is not restricted as to the use of funds borrowed under these credit agreements. Therefore, such commitments represent an additional and immediate source of liquidity. The Company's strong financial position enhances its ability to obtain additional funds if required. Shareholders' equity per Common Share at September 30, 1996 improved to $12.07 from $11.05 at December 31, 1995. The third quarter cash dividend of $0.17 per share was paid on September 6, 1996 to shareholders of record on August 16, 1996. On October 15, 1996, the fourth quarter cash dividend of $0.17 per share was declared payable on December 6, 1996 to shareholders of record on November 15, 1996. Diebold, Incorporated shares are listed on the New York Stock Exchange under the symbol of DBD. The market price during the first nine months of 1996 fluctuated within the range of $33.67 and $58.63. Results of Operations - --------------------- Third Quarter 1996 Comparison to Third Quarter 1995 - --------------------------------------------------- Net sales for the third quarter of 1996 increased from the same period in 1995 by $55,796 or 26%. Total gross profit increased $20,096 or 27% over the third quarter's performance in 1995. Product gross profit accounted for the majority of this increase as the result of increased sales volume of self-service terminals both domestically and internationally and continuing cost containment efforts. Operating expenses increased $7,330 or 16% over the same period in 1995 largely due to higher selling expenses resulting from the increases in sales volumes and from expenditures in various new marketing programs. Operating profit increased $12,766 or 45% over third quarter 1995's performance. -7- 8 DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 1O-Q ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) As of September 30, 1996 (Unaudited/Dollars in thousands except for per share data) Nine-Month 1996 Comparison to Nine-Month 1995 - --------------------------------------------- Consolidated net sales for the nine months ended 1996 exceeded the same period in 1995 by $116,072 or 19%. Total gross profit increased $44,161 or 21% over 1995's performance. Product gross profit continued to account for the majority of this increase in total gross profit resulting from increased domestic and international sales volumes, reduction of costs and economies of scale in the manufacturing process. Operating expenses increased $20,873 or 16% over the same period in 1995 due to the higher selling and administrative expenses associated with the increase in sales activity, expenditures related to the research and development of new products and expenditures in various new marketing programs. Operating profit for the nine months ended 1996 exceeded the same period in 1995 by $23,288 or 30%. The Company's backlog of unfilled orders was $238,158 at September 30, 1996, compared to $169,308 at September 30, 1995, a $68,850 or 41% increase. The Company believes, however, that order backlog information is not, by itself, a meaningful indicator of future revenue streams. There are numerous factors which influence the amount and timing of revenue recognized in future periods. PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits 3.1(i) Amended and Restated Articles of Incorporation of Diebold, Incorporated -- incorporated by reference to Exhibit 3.1(i) of Registrant's Annual Report on Form 10-K for the year ended December 31, 1994. 3.1(ii) Code of Regulations -- incorporated by reference to Exhibit 4(c) to Registrant's Post-Effective Amendment No. 1 to Form S-8 Registration Statement No. 33-32960. 3.2 Certificate of Amendment by Shareholders to Amended Articles of Incorporation of Diebold, Incorporated --incorporated by reference to Exhibit 3.2 to Registrant's Form 10-Q for the quarter ended March 31, 1996. 4. Rights Agreement dated as of February 10, 1989 between Diebold, Incorporated and Ameritrust Company National Association -- incorporated by reference to Exhibit 2.1 to Registrant's Registration Statement on Form 8-A dated February 10, 1989. *10.1 Form of Employment Agreement as amended and restated as of September 13, 1990 -- incorporated by reference to Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1990. * Reflects management contract or other compensatory arrangement. -8- 9 *10.2 Schedule of Certain Officers who are Parties to Employment Agreements in the form of Exhibit 10.1 --incorporated by reference to Exhibit 10.2 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995. *10.3 Supplemental Retirement Benefit Agreement with William T. Blair -- incorporated by reference to Exhibit 10.3 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995. *10.5 Supplemental Employee Retirement Plan (as amended January 1, 1994) -- incorporated by reference to Exhibit 10.5 of Registrant's Annual Report on Form 10-K for the year ended December 31, 1994. 10.6 Amended and Restated Partnership Agreement dated as of September 12, 1990 -- incorporated by reference to Exhibit 10 to Registrant's Form 8-K dated September 26, 1990. *10.7 1985 Deferred Compensation Plan for Directors of Diebold, Incorporated -- incorporated by reference to Exhibit 10.7 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. *10.8 1991 Equity and Performance Incentive Plan -- incorporated by reference to Exhibit 4(a) to Registrant's Form S-8 Registration Statement No. 33-39988. *10.9 Long-Term Executive Incentive Plan -- incorporated by reference to Exhibit 10.9 of Registrant's Annual Report on Form 10-K for the year ended December 31, 1993. *10.10 1992 Deferred Incentive Compensation Plan (as amended and restated as of July 1, 1993) -- incorporated by reference to Exhibit 10.10 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993. *10.11 Annual Incentive Plan -- incorporated by reference to Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. *10.12 Employment Agreement with Robert P. Barone -- incorporated by reference to Exhibit 10.12 to Registrant's Form 10-Q for the quarter ended September 30, 1994. 27. Financial Data Schedule. (b) Reports on Form 8-K. No reports have been filed by the Registrant on Form 8-K during the period covered by this report. * Reflects management contract or other compensatory arrangement. -9- 10 DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DIEBOLD, INCORPORATED --------------------- (Registrant) Date: October 29, 1996 By: /s/ Robert W. Mahoney ----------------- --------------------- Robert W. Mahoney Chairman of the Board, President and Chief Executive Officer Date: October 29, 1996 By: /s/ Gerald F. Morris ----------------- -------------------- Gerald F. Morris Executive Vice President and Chief Financial Officer (Principal Accounting and Financial Officer) -10- 11 DIEBOLD, INCORPORATED FORM 10-Q INDEX TO EXHIBITS
EXHIBIT NO. PAGE NO. - ----------- -------- 3.1 (i) Amended and Restated Articles of Incorporation of Diebold, Incorporated -- incorporated by reference to Exhibit 3.1(i) of Registrant's Annual Report on Form 10-K for the year ended December 31, 1994. -- 3.1 (ii) Code of Regulations -- incorporated by reference to Exhibit 4(c) to Registrant's Post-Effective Amendment No. 1 to Form S-8 Registration Statement No. 33-32960. -- 3.2 Certificate of Amendment by Shareholders to Amended Articles of Incorporation of Diebold, Incorporated -- incorporated by reference to Exhibit 3.2 to Registrant's Form 10-Q for the quarter ended March 31, 1996. -- 4. Rights Agreement dated as of February 10, 1989 between Diebold, Incorporated and Ameritrust Company National Association -- incorporated by reference to Exhibit 2.1 to Registrant's Registration Statement on Form 8-A dated February 10, 1989. -- 10.1 Form of Employment Agreement as amended and restated as of September 13, 1990 -- incorporated by reference to Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1990. -- 10.2 Schedule of Certain Officers who are Parties to Employment Agreements in the form of Exhibit 10.1 -- incorporated by reference to Exhibit 10.2 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995. -- 10.3 Supplemental Retirement Benefit Agreement with William T. Blair -- incorporated by reference to Exhibit 10.3 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995. --
-11- 12
EXHIBIT NO. PAGE NO. - ----------- --------- 10.5 Supplemental Employee Retirement Plan (as amended January 1, 1994) -- incorporated by reference to Exhibit 10.5 of Registrant's Annual Report on Form 10-K for the year ended December 31, 1994. -- 10.6 Amended and Restated Partnership Agreement dated as of September 12, 1990 -- incorporated by reference to Exhibit 10 to Registrant's Form 8-K dated September 26, 1990. -- 10.7 1985 Deferred Compensation Plan for Directors of Diebold, Incorporated -- incorporated by reference to Exhibit 10.7 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. -- 10.8 1991 Equity and Performance Incentive Plan -- incorporated by reference to Exhibit 4(a) to Registrant's Form S-8 Registration Statement No. 33-39988. -- 10.9 Long-Term Executive Incentive Plan -- incorporated by reference to Exhibit 10.9 of Registrant's Annual Report on Form 10-K for the year ended December 31, 1993. -- 10.10 1992 Deferred Incentive Compensation Plan (as amended and restated as of July 1, 1993) -- incorporated by reference to Exhibit 10.10 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993. -- 10.11 Annual Incentive Plan -- incorporated by reference to Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. -- 10.12 Employment Agreement with Robert P. Barone -- incorporated by reference to Exhibit 10.12 to Registrant's Form 10-Q for the quarter ended September 30, 1994. -- 27. Financial Data Schedule. 13
-12- EX-27 2 EXHIBIT 27
5 1,000 U.S. DOLLARS 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 1 26,160 45,600 242,088 0 99,295 463,476 193,980 103,345 836,429 223,343 0 57,548 0 0 514,777 836,429 483,800 736,019 297,707 480,076 155,153 0 0 103,963 34,823 69,140 0 0 0 69,140 $1.51 $1.51
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