Exhibit 99.1
|
pressrelease |
| Media contact: | Investor contact: | |
| Mike Jacobsen, APR | Chris Bast | |
| +1 330 490 3796 | +1 330 490 6908 | |
| michael.jacobsen@diebold.com | christopher.bast@diebold.com |
FOR IMMEDIATE RELEASE:
July 27, 2011
DIEBOLD REPORTS SECOND QUARTER FINANCIAL RESULTS
Earnings overview presentation available at http://www.diebold.com/DBD2Q11.pdf
| • | 2Q EPS from continuing operations of $.31, or $.44 non-GAAP* |
| • | Total revenue for 2Q 2011 essentially flat compared with prior-year period |
| • | Balance sheet remains strong; 2Q 2011 net debt* decreased $44.4 million from 2Q 2010 |
| • | Growth in North America accelerates; company makes operational progress in EMEA |
| • | Company reaffirms FY non-GAAP* EPS guidance of $2.00 to $2.20 |
NORTH CANTON, Ohio – Diebold, Incorporated (NYSE: DBD) today reported second quarter 2011 net income from continuing operations attributable to Diebold of $20.3 million, or $.31 per share, down from $30.4 million and $.46 per share, respectively, from the second quarter 2010. Second-quarter 2011 revenue was $662.4 million, down 0.4% from the second quarter 2010.
Non-GAAP earnings per share* from continuing operations attributable to Diebold, net of tax, in the second quarter 2011 were $.44 per share, down from $.53 per share in the second quarter 2010.
Business Review
Management commentary
“We had a solid second quarter, with better-than-expected results in several key areas of the company,” said Thomas W. Swidarski, Diebold president and chief executive officer. “Growth continues to accelerate in North America, particularly in the U.S. regional bank space, driven by strong demand for advanced deposit automation and new technology needed to meet pending regulatory and industry compliance standards. We also drove operational progress in EMEA during the quarter, and are on track to reach a break-even run rate in the region by year end. In addition, some business closed during the quarter earlier than originally forecasted, which reduces risk to the second half of our forecast for the year.”
Swidarski continued, “Given the earlier-than-anticipated business, as well as our growing backlog in financial self-service, we’ve gained more confidence in our outlook and are reaffirming our non-GAAP earnings guidance of $2.00 to $2.20* per share. Our expanding offerings in services, coupled with innovative, reliable technology and our ability to consistently deliver on our commitments to customers, gives me confidence that we will meet our objectives as we look toward the remainder of 2011 and beyond.”
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| * | See accompanying notes for non-GAAP measures. |
PAGE 2 / DIEBOLD REPORTS 2011 SECOND QUARTER FINANCIAL RESULTS
Second Quarter Orders (constant currency)
Total global product and services orders decreased 1% compared with the prior-year period. However, excluding Brazil election systems and lottery, total global orders increased 5%. North America orders benefitted from particularly strong financial self-service growth, led by significant growth in the U.S. regional bank space. Additionally Asia Pacific orders increased 18% led by strong performance in India and Southeast Asia. This was offset by decreases in orders within EMEA and Latin America of 3% and 30%, respectively, during the quarter. The decrease in Latin America orders was primarily the result of a significant decrease in election orders and the timing of major bank financial self-service orders.
Results of Operations
Profit/loss summary – 2nd quarter comparison (Dollars in millions)
| Q2 2011 | Q2 2010 | |||||||||||||||||||||||||||||||||||||||||||||||
| Rev | Gross Profit |
% of Sales |
OPEX | OP | % of Sales |
Rev | Gross Profit |
% of Sales |
OPEX | OP | % of Sales |
|||||||||||||||||||||||||||||||||||||
| $662.4 | $ | 169.5 | 25.6 | % | $ | 144.4 | $ | 25.1 | 3.8 | % | GAAP Results | $ | 665.2 | $ | 178.1 | 26.8 | % | $ | 131.3 | $ | 46.9 | 7.0 | % | |||||||||||||||||||||||||
| 2.8 | (1.7 | ) | 4.5 | Restructuring | 0.2 | (1.0 | ) | 1.2 | ||||||||||||||||||||||||||||||||||||||||
| — | (4.7 | ) | 4.7 | Non-rout. Exp | — | (1.1 | ) | 1.1 | ||||||||||||||||||||||||||||||||||||||||
| — | — | — | Non-rout. Inc | — | 0.1 | (0.1 | ) | |||||||||||||||||||||||||||||||||||||||||
| — | (3.0 | ) | 3.0 | Impairment | — | (4.1 | ) | 4.1 | ||||||||||||||||||||||||||||||||||||||||
| $662.4 | $ | 172.3 | 26.0 | % | $ | 135.0 | $ | 37.3 | 5.6 | % | Non-GAAP Results | $ | 665.2 | $ | 178.3 | 26.8 | % | $ | 125.2 | $ | 53.2 | 8.0 | % | |||||||||||||||||||||||||
Profit/loss summary – year-to-date comparison (Dollars in millions)
| YTD 6/30/11 | YTD 6/30/10 | |||||||||||||||||||||||||||||||||||||||||||||||
| Rev | Gross Profit |
% of Sales |
OPEX | OP | % of Sales |
Rev | Gross Profit |
% of Sales |
OPEX | OP | % of Sales |
|||||||||||||||||||||||||||||||||||||
| $1,276.5 | $ | 318.9 | 25.0 | % | $ | 284.9 | $ | 34.0 | 2.7 | % | GAAP Results | $ | 1,284.2 | $ | 336.2 | 26.2 | % | $ | 248.7 | $ | 87.4 | 6.8 | % | |||||||||||||||||||||||||
| 9.0 | (7.3 | ) | 16.3 | Restructuring | 0.3 | (2.0 | ) | 2.3 | ||||||||||||||||||||||||||||||||||||||||
| — | (10.5 | ) | 10.5 | Non-rout. Exp | — | (1.1 | ) | 1.1 | ||||||||||||||||||||||||||||||||||||||||
| — | — | — | Non-rout. Inc | — | 4.1 | (4.1 | ) | |||||||||||||||||||||||||||||||||||||||||
| — | (3.0 | ) | 3.0 | Impairment | — | (4.1 | ) | 4.1 | ||||||||||||||||||||||||||||||||||||||||
| $1,276.5 | $ | 327.9 | 25.7 | % | $ | 264.2 | $ | 63.7 | 5.0 | % | Non-GAAP Results | $ | 1,284.2 | $ | 336.4 | 26.2 | % | $ | 245.6 | $ | 90.8 | 7.1 | % | |||||||||||||||||||||||||
The company’s management believes excluding restructuring charges, non-routine expenses/income and impairment charges from operating margins is an indication of the company’s baseline performance. 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.
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| * | See accompanying notes for non-GAAP measures. |
PAGE 3 / DIEBOLD REPORTS 2011 SECOND QUARTER FINANCIAL RESULTS
Revenue
Total revenue for the second quarter 2011 was essentially flat, including a net positive currency impact of approximately 5%. Growth in North America was more than offset by a revenue decline in Latin America, where Brazil benefited from $46.2 million in election systems revenue in the second quarter of 2010. Asia Pacific revenue increased 6%, while EMEA revenue increased 36%, primarily due to strong performance in Africa and Eastern Europe.
Gross Margin
Total gross margin for the second quarter 2011 was 25.6%, a decrease of 1.2 percentage points from the second quarter of 2010. Total gross margin in the second quarter of 2011 included restructuring charges of $2.8 million associated with the previously announced restructuring plan for EMEA. There were $0.2 million in restructuring charges in the second quarter of 2010.
Operating Expenses
Total operating expenses as a percentage of revenue for the second quarter 2011 were 21.8%, an increase of 2.1 percentage points from the second quarter of 2010. Operating expenses in the second quarter 2011 included $1.7 million of restructuring charges primarily associated with the previously announced restructuring plan for EMEA. Second quarter 2011 operating expenses also included non-routine expenses of $4.7 million, which includes $4.2 million in legal, consultative, audit and severance costs related to the previously disclosed Foreign Corrupt Practices Act (FCPA) investigation, and $0.5 million for the settlement related to previously disclosed employment class-action lawsuits. In addition, operating expenses included a non-cash intangible asset impairment charge of $3.0 million that is primarily related to a prior acquisition.
Operating expenses in second quarter 2010 included non-routine expenses of $1.1 million related to the FCPA investigation, and $4.1 million in impairment charges and restructuring charges of $1.0 million related to the U.S. workforce reduction.
Operating Profit
Operating margin was 3.8% of net sales in the second quarter 2011, a decrease of 3.2 percentage points from the second quarter 2010. Non-GAAP operating profit* in the second quarter 2011 was $37.3 million, or 5.6% of sales, and $53.2 million, or 8.0% of sales, in the second quarter 2010 excluding restructuring charges and non-routine expenses/income and impairment charges from both periods.
Taxes on Income from Continuing Operations
Second quarter 2011 income taxes on continuing operations were $6.6 million. This resulted in a second quarter income tax rate of 23%, or 25% on a non-GAAP basis*. Full-year, non-GAAP tax rate is still expected to be approximately 28%*.
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| * | See accompanying notes for non-GAAP measures. |
PAGE 4 / DIEBOLD REPORTS 2011 SECOND QUARTER FINANCIAL RESULTS
Income from Continuing Operations, net of tax (attributable to Diebold)
Income from continuing operations, net of tax, was $20.3 million, or 3.1% of revenue in the second quarter 2011, a decrease of 1.5 percentage points from the second quarter 2010. Included in the second quarter 2011 net of tax results are restructuring charges of $3.8 million, $3.0 million in non-routine expenses, and $1.9 million in impairment charges. Income from continuing operations net of tax in the second quarter 2010 included impairment charges of $3.1 million, net non-routine expenses of $0.8 million, and restructuring charges of $0.9 million.
Balance Sheet, Cash Flow and Liquidity
The company’s net debt* was $149.7 million at June 30, 2011, an increase in net debt of $184.9 million from the net investment* position at December 31, 2010 and a reduction of $44.4 million from June 30, 2010. The company’s net debt to capital ratio was 14% at June 30, 2011, -4% at December 31, 2010 and 16% at June 30, 2010.
Net cash used in operating activities was $100.0 million for the six months ended June 30, 2011, an increase of $82.5 million from the six months ended June 30, 2010. Free cash use* in the second quarter 2011 was $22.6 million, a change of $45.5 million from the second quarter 2010. The company typically generates the majority of its cash flow during the fourth quarter.
In the second quarter 2011, Diebold repurchased 1.1 million of its common shares for about $36 million under its repurchase plan. This leaves 2.4 million shares on the current Board authorization at June 30, 2011.
Restructuring and non-routine expenses and income
The company incurred restructuring charges, net of tax, of $3.8 million, or $0.06 per share in the second quarter of 2011. The majority of these charges were associated with the previously announced restructuring plan in EMEA. In the second quarter 2010, restructuring charges net of tax were $0.9 million, or $0.01 per share. These charges were largely related to an accrual for severance costs associated with the reorganization of the company’s North America and corporate functions. For the full year, the company expects its restructuring charges to be in the range of $.31 to $.35 per share.
Foreign Corrupt Practices Act review
As previously disclosed, Diebold continues to conduct a global internal review of its compliance with the FCPA. The company excludes costs related to this review from its non-GAAP operating results as it provides a better overall understanding of the company’s historical financial performance and future prospects. Diebold cannot predict the length, scope or results of this review or related government investigations, or the impact, if any, on its results of operations.
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| * | See accompanying notes for non-GAAP measures. |
PAGE 5 / DIEBOLD REPORTS 2011 SECOND QUARTER FINANCIAL RESULTS
Full-year 2011 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. Expectations for the full year 2011 are as follows:
| • | Revenue |
| Previous Guidance | Current Guidance | |||
| Total revenue |
3% to 6% | 3% to 5% | ||
| Financial self-service |
5% to 8% | 6% to 9% | ||
| Security |
4% to 7% | -3% to flat | ||
| Brazil election sys. / lottery |
$90 million to $100 million | $100 million to $105 million |
| • | Earnings per share |
| Previous Guidance | Current Guidance | |||
| 2011 EPS (GAAP) |
$1.50 - $1.78 | $1.43 - $1.69 | ||
| Restructuring charges |
.28 - .23 | .35 - .31 | ||
| Non-routine exp. |
.22 - .19 | .19 - .17 | ||
| Impairment |
N/A | .03 - .03 | ||
| 2011 EPS non-GAAP* |
$2.00 - $2.20 | $2.00 - $2.20 |
Overview presentation and conference call
More information on Diebold’s quarterly earnings, including additional financial analysis and an earnings overview presentation, is available on Diebold’s Investor Relations website. Thomas W. Swidarski and Bradley C. Richardson will discuss the company’s financial performance during a conference call today at 10:00 a.m. (ET). Both the presentation and access to the call are available at http://investors.diebold.com. The replay can also be accessed on the site for up to three months after the call.
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PAGE 6 / DIEBOLD REPORTS 2011 SECOND QUARTER FINANCIAL RESULTS
Revenue Summary by Product, Service and Geographic Area
Revenue Summary by Product and Service Solutions
(In Thousands)
| Q2 2011 | Q2 2010 | % Change | YTD 6/30/2011 | YTD 6/30/2010 | % Change | |||||||||||||||||||
| Financial Self-Service |
||||||||||||||||||||||||
| Products |
$ | 225,078 | $ | 203,741 | 10 | % | $ | 423,718 | $ | 407,441 | 4 | % | ||||||||||||
| Services |
285,337 | 265,449 | 7 | % | 549,793 | 533,257 | 3 | % | ||||||||||||||||
| Total Fin. self-service |
510,415 | 469,190 | 9 | % | 973,511 | 940,698 | 3 | % | ||||||||||||||||
| Security solutions |
||||||||||||||||||||||||
| Products |
44,431 | 48,945 | -9 | % | 87,844 | 100,395 | -13 | % | ||||||||||||||||
| Services |
103,602 | 100,832 | 3 | % | 203,520 | 194,273 | 5 | % | ||||||||||||||||
| Total Security |
148,033 | 149,777 | -1 | % | 291,364 | 294,668 | -1 | % | ||||||||||||||||
| Total Fin. self-service & security |
658,448 | 618,967 | 6 | % | 1,264,875 | 1,235,366 | 2 | % | ||||||||||||||||
| Election Systems & Lottery |
||||||||||||||||||||||||
| Products |
3,922 | 46,198 | n/m | 11,652 | 48,793 | n/m | ||||||||||||||||||
| Services |
12 | 15 | -25 | % | 12 | 20 | -67 | % | ||||||||||||||||
| Total Election Systems & Lottery |
3,934 | 46,213 | n/m | 11,664 | 48,813 | n/m | ||||||||||||||||||
| Total Revenue |
$ | 662,382 | $ | 665,180 | 0 | % | $ | 1,276,539 | $ | 1,284,179 | -1 | % | ||||||||||||
| Revenue Summary by Geographic Segment |
|
|||||||||||||||||||||||
| Q2 2011 | Q2 2010 | % Change | YTD 6/30/2011 | YTD 6/30/2010 | % Change | |||||||||||||||||||
| Diebold North America |
$ | 337,992 | $ | 322,635 | 5 | % | $ | 643,956 | $ | 618,835 | 4 | % | ||||||||||||
| Diebold International |
||||||||||||||||||||||||
| Latin America (incl. Brazil) |
124,206 | 175,800 | -29 | % | 277,094 | 325,327 | -15 | % | ||||||||||||||||
| Asia Pacific |
96,122 | 90,416 | 6 | % | 180,011 | 188,858 | -5 | % | ||||||||||||||||
| Europe, Middle East, Africa |
104,062 | 76,329 | 36 | % | 175,478 | 151,159 | 16 | % | ||||||||||||||||
| Total Diebold International |
324,390 | 342,545 | -5 | % | 632,583 | 665,344 | -5 | % | ||||||||||||||||
| Total Revenue |
$ | 662,382 | $ | 665,180 | 0 | % | $ | 1,276,539 | $ | 1,284,179 | -1 | % | ||||||||||||
Other income/(expense), net summary:
| Q2 2011 | Q2 2010 | YTD 6/30/11 | YTD 6/30/10 | |||||||||||||
| Other income/(expense) |
$ | 1,434 | $ | 1,393 | $ | 1,457 | $ | 2,101 | ||||||||
| Foreign ex. gain/(loss), net |
1,492 | (553 | ) | 446 | (5,194 | ) | ||||||||||
| Interest expense |
(9,515 | ) | (9,301 | ) | (18,188 | ) | (18,356 | ) | ||||||||
| Investment income |
9,669 | 6,017 | 20,567 | 13,489 | ||||||||||||
| Total other income / (expense), net |
$ | 3,080 | ($ | 2,444 | ) | $ | 4,282 | ($ | 7,960 | ) | ||||||
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PAGE 7 / DIEBOLD REPORTS 2011 SECOND QUARTER FINANCIAL RESULTS
Notes for Non-GAAP Measures
| 1. | Reconciliation of diluted GAAP EPS to non-GAAP EPS from continuing operations measures: |
| Q2 2011 | Q2 2010 | YTD 6/30/11 | YTD 6/30/10 | |||||||||||||
| Total EPS from continuing operations (GAAP measure) |
$ | 0.31 | $ | 0.46 | $ | 0.34 | $ | 0.83 | ||||||||
| Restructuring charges |
0.06 | 0.01 | 0.20 | 0.02 | ||||||||||||
| Non-routine expenses |
0.04 | 0.01 | 0.10 | 0.01 | ||||||||||||
| Non-routine income |
— | — | — | (0.05 | ) | |||||||||||
| Impairment charges |
0.03 | 0.05 | 0.03 | 0.05 | ||||||||||||
| Total EPS (non-GAAP measure) |
$ | 0.44 | $ | 0.53 | $ | 0.67 | $ | 0.86 | ||||||||
The company’s management believes excluding restructuring charges, non-routine expenses/income and impairment charges is useful to investors because it provides an overall understanding of the company’s historical financial performance and future prospects. Management believes non-GAAP EPS from continuing operations is an indication of the company’s base-line performance. 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.
| 2. | Free cash flow (use) is calculated as follows: |
| Q2 2011 | Q2 2010 | YTD 6/30/11 | YTD 6/30/10 | |||||||||||||
| Net cash provided / (used) by operating activities (GAAP measure) |
$ | (9,823 | ) | $ | 38,751 | $ | (99,974 | ) | $ | (17,472 | ) | |||||
| Capital expenditures |
(12,785 | ) | (15,813 | ) | (23,687 | ) | (26,916 | ) | ||||||||
| Free cash flow / (use) (non-GAAP measure) |
$ | (22,608 | ) | $ | 22,938 | $ | (123,661 | ) | $ | (44,388 | ) | |||||
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 utilized to fund our dividends, as well as mandatory debt payments and other investment opportunities. 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 investment/(debt) is calculated as follows: |
| 6/30/2011 | 12/31/2010 | 6/30/2010 | ||||||||||
| Cash, cash equivalents and short-term investments (GAAP measure) |
$ | 539,969 | $ | 601,781 | $ | 383,101 | ||||||
| Debt instruments |
(689,698 | ) | (566,632 | ) | (577,193 | ) | ||||||
| Net investment/(debt) (non-GAAP measure) |
$ | (149,729 | ) | $ | 35,149 | $ | (194,092 | ) | ||||
The company’s management believes that given the significant cash, cash equivalents and other investments on its balance sheet that net cash against outstanding debt is a meaningful net debt calculation. A vast majority of the Company’s cash and cash equivalents and short-term investments reside in international tax jurisdictions.
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PAGE 8 / DIEBOLD REPORTS 2011 SECOND QUARTER FINANCIAL RESULTS
| 4. | Reconciliation of GAAP Operating Margin to non-GAAP measures |
| Q2 2011 | Q2 2010 | YTD 6/30/2011 | YTD 6/30/2010 | |||||||||||||
| GAAP Operating Profit |
$ | 25,102 | $ | 46,855 | $ | 33,971 | $ | 87,440 | ||||||||
| GAAP Operating Profit % |
3.8 | % | 7.0 | % | 2.7 | % | 6.8 | % | ||||||||
| Restructuring Charges |
4,485 | 1,194 | 16,286 | 2,310 | ||||||||||||
| Non-routine Expenses |
4,709 | 1,057 | 10,480 | 1,075 | ||||||||||||
| Non-routine Income |
— | (50 | ) | — | (4,148 | ) | ||||||||||
| Impairment Charges |
2,962 | 4,096 | 2,962 | 4,096 | ||||||||||||
| Non GAAP Operating Profit |
$ | 37,258 | $ | 53,152 | $ | 63,699 | $ | 90,773 | ||||||||
| Non GAAP Operating Profit % |
5.6 | % | 8.0 | % | 5.0 | % | 7.1 | % | ||||||||
The company’s management believes excluding restructuring charges, non-routine expenses/income and impairment charges from operating margins is an indication of the company’s baseline performance. 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”. 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-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; |
| • | the amount of cash and non-cash charges in connection with the restructuring of the company’s EMEA operations |
| • | the continuing effects of the economic downturn 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, as well as adversely impact the availability and cost of credit; |
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PAGE 9 / DIEBOLD REPORTS 2011 SECOND QUARTER FINANCIAL RESULTS
| • | 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 impact of any current/pending lawsuits; |
| • | 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 such as the recently enacted U.S. health care legislation; |
| • | 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 SEC investigation; 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 16,000 associates with representation in nearly 90 countries worldwide and is headquartered in the Canton, Ohio region, USA. Diebold is publicly traded on the New York Stock Exchange under the symbol ‘DBD.’ For more information, visit the company’s website at www.diebold.com.
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DIEBOLD, INCORPORATED
CONDENSED CONSOLIDATED INCOME STATEMENTS - UNAUDITED
(IN THOUSANDS EXCEPT EARNINGS PER SHARE)
| Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net Sales |
||||||||||||||||
| Product |
$ | 273,431 | $ | 298,884 | $ | 523,214 | $ | 556,629 | ||||||||
| Service |
388,951 | 366,296 | 753,325 | 727,550 | ||||||||||||
| Total |
662,382 | 665,180 | 1,276,539 | 1,284,179 | ||||||||||||
| Cost of goods |
||||||||||||||||
| Product |
204,769 | 221,742 | 393,632 | 414,019 | ||||||||||||
| Service |
288,123 | 265,294 | 564,013 | 534,006 | ||||||||||||
| Total |
492,892 | 487,036 | 957,645 | 948,025 | ||||||||||||
| Gross Profit |
169,490 | 178,144 | 318,894 | 336,154 | ||||||||||||
| Percent of net sales |
25.6 | % | 26.8 | % | 25.0 | % | 26.2 | % | ||||||||
| Operating expenses |
||||||||||||||||
| Selling, general and administrative |
122,051 | 110,791 | 243,162 | 209,768 | ||||||||||||
| Research, development and engineering |
19,375 | 16,402 | 38,799 | 34,850 | ||||||||||||
| Impairment of assets |
2,962 | 4,096 | 2,962 | 4,096 | ||||||||||||
| Total |
144,388 | 131,289 | 284,923 | 248,714 | ||||||||||||
| Percent of net sales |
21.8 | % | 19.7 | % | 22.3 | % | 19.4 | % | ||||||||
| Operating profit |
25,102 | 46,855 | 33,971 | 87,440 | ||||||||||||
| Percent of net sales |
3.8 | % | 7.0 | % | 2.7 | % | 6.8 | % | ||||||||
| Other income / (expense), net |
3,080 | (2,444 | ) | 4,282 | (7,960 | ) | ||||||||||
| Income from continuing operations before taxes |
28,182 | 44,411 | 38,253 | 79,480 | ||||||||||||
| Taxes on income |
(6,580 | ) | (13,338 | ) | (12,505 | ) | (23,215 | ) | ||||||||
| Income from continuing operations |
21,602 | 31,073 | 25,748 | 56,265 | ||||||||||||
| Income (loss) from discontinued operations - net of tax |
529 | (683 | ) | 518 | (1,653 | ) | ||||||||||
| Net income |
22,131 | 30,390 | 26,266 | 54,612 | ||||||||||||
| Less: Net income attrib to noncontrolling interest |
(1,327 | ) | (659 | ) | (2,961 | ) | (957 | ) | ||||||||
| Net income attributable to Diebold, Inc. |
$ | 20,804 | $ | 29,731 | $ | 23,305 | $ | 53,655 | ||||||||
| Basic weighted average shares outstanding |
65,028 | 65,936 | 65,393 | 66,121 | ||||||||||||
| Diluted weighted average shares outstanding |
65,482 | 66,636 | 65,842 | 66,678 | ||||||||||||
| Basic Earnings Per Share: |
||||||||||||||||
| Income from continuing operations |
$ | 0.31 | $ | 0.46 | $ | 0.35 | $ | 0.84 | ||||||||
| Income (loss) from discontinued operations |
0.01 | (0.01 | ) | 0.01 | (0.03 | ) | ||||||||||
| Net income |
$ | 0.32 | $ | 0.45 | $ | 0.36 | $ | 0.81 | ||||||||
| Diluted Earnings Per Share: |
||||||||||||||||
| Income from continuing operations |
$ | 0.31 | $ | 0.46 | $ | 0.34 | $ | 0.83 | ||||||||
| Income (loss) from discontinued operations |
0.01 | (0.01 | ) | 0.01 | (0.03 | ) | ||||||||||
| Net income |
$ | 0.32 | $ | 0.45 | $ | 0.35 | $ | 0.80 | ||||||||
| Amounts Attributable to Diebold, Inc. |
||||||||||||||||
| Income from continuing operations - net of tax |
$ | 20,275 | $ | 30,414 | $ | 22,787 | $ | 55,308 | ||||||||
| Income (loss) from discontinued operations |
529 | (683 | ) | 518 | (1,653 | ) | ||||||||||
| Net income attributable to Diebold, Inc. |
$ | 20,804 | $ | 29,731 | $ | 23,305 | $ | 53,655 | ||||||||
DIEBOLD, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
| June 30, 2011 |
December 31, 2010 |
|||||||
| (Unaudited) | ||||||||
| ASSETS |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 278,740 | $ | 328,658 | ||||
| Short-term investments |
261,229 | 273,123 | ||||||
| Trade receivables, net |
446,402 | 404,501 | ||||||
| Inventories |
496,864 | 444,575 | ||||||
| Other current assets |
307,196 | 263,179 | ||||||
| Total current assets |
1,790,431 | 1,714,036 | ||||||
| Securities and other investments |
74,928 | 76,138 | ||||||
| Property, plant and equipment, net |
202,203 | 203,462 | ||||||
| Goodwill |
278,292 | 269,398 | ||||||
| Other assets |
250,744 | 256,756 | ||||||
| Total assets |
$ | 2,596,598 | $ | 2,519,790 | ||||
| LIABILITIES AND EQUITY |
||||||||
| Current liabilities |
||||||||
| Notes payable |
$ | 43,900 | $ | 15,038 | ||||
| Accounts payable |
206,429 | 214,288 | ||||||
| Other current liabilities |
558,056 | 580,439 | ||||||
| Total current liabilities |
808,385 | 809,765 | ||||||
| Long-term debt |
644,661 | 550,368 | ||||||
| Long-term liabilities |
161,066 | 169,843 | ||||||
| Total Diebold, Inc. shareholders’ equity |
951,308 | 961,155 | ||||||
| Noncontrolling Interests |
31,178 | 28,659 | ||||||
| Total equity |
982,486 | 989,814 | ||||||
| Total liabilities and equity |
$ | 2,596,598 | $ | 2,519,790 | ||||
DIEBOLD, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(IN THOUSANDS)
| Six months ended June 30, | ||||||||
| 2011 | 2010 | |||||||
| Cash flow from operating activities: |
||||||||
| Net income |
$ | 26,266 | $ | 54,612 | ||||
| Adjustments to reconcile net income to cash used in operating activities: |
||||||||
| Devaluation on Venezuelan balance sheet |
— | 6,390 | ||||||
| Depreciation and amortization |
39,034 | 36,261 | ||||||
| Other |
7,330 | 8,834 | ||||||
| Cash flow from changes in certain assets and liabilities: |
||||||||
| Trade receivables |
(28,284 | ) | (97,317 | ) | ||||
| Inventories |
(36,452 | ) | (35,531 | ) | ||||
| Accounts payable |
(13,392 | ) | 22,318 | |||||
| Certain other assets and liabilities |
(94,476 | ) | (13,039 | ) | ||||
| Net cash used in operating activities |
(99,974 | ) | (17,472 | ) | ||||
| Cash flow from investing activities: |
||||||||
| Proceeds from sale of discontinued operations |
2,520 | 1,807 | ||||||
| Payments for acquisitions, net of cash acquired |
— | — | ||||||
| Net investment activity |
29,983 | 19,954 | ||||||
| Capital expenditures |
(23,687 | ) | (26,916 | ) | ||||
| Increase in certain other assets & other |
3,975 | (11,769 | ) | |||||
| Net cash provided by (used in) investing activities |
12,791 | (16,924 | ) | |||||
| Cash flow from financing activities: |
||||||||
| Dividends paid |
(37,090 | ) | (36,076 | ) | ||||
| Net borrowings |
123,116 | 6,891 | ||||||
| Repurchase of common shares |
(57,591 | ) | (21,128 | ) | ||||
| Other |
2,629 | 965 | ||||||
| Net cash provided by financing activities |
31,064 | (49,348 | ) | |||||
| Effect of exchange rate changes on cash |
6,201 | (13,063 | ) | |||||
| Decrease in cash and cash equivalents |
(49,918 | ) | (96,807 | ) | ||||
| Cash and cash equivalents at the beginning of the period |
328,658 | 328,426 | ||||||
| Cash and cash equivalents at the end of the period |
$ | 278,740 | $ | 231,619 | ||||