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8-K - FORM 8-K - DIEBOLD NIXDORF, Inc | l41857e8vk.htm |
Exhibit 99.1
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 | |||
FINAL 2/11/11 |
FOR IMMEDIATE RELEASE:
February 14, 2011
DIEBOLD REPORTS FOURTH QUARTER AND FULL-YEAR FINANCIAL RESULTS
Earnings overview presentation available at http://www.diebold.com/DBD4Q10.pdf
| 4Q EPS from cont. ops. of ($1.83), or $0.73 non-GAAP*; FY EPS of ($0.31), or $2.33 non-GAAP* | ||
| Total revenue for 4Q 2010 increased 9%; FY revenue increased 4% | ||
| YTD net debt* decreased $100.5 million to a net investment of $35.1 million | ||
| Company records $169 million non-cash, goodwill impairment charge in its EMEA business | ||
| Board of directors authorizes a total 4 million shares under the companys repurchase plan; intent is to execute in 2011 |
NORTH CANTON, Ohio Diebold, Incorporated (NYSE: DBD) today reported fourth quarter 2010 loss
from continuing operations attributable to Diebold, net of tax, of ($119.9) million, or ($1.83) per
share, down from $7.9 million and $.12 per share, respectively, from the fourth quarter 2009.
Fourth-quarter 2010 revenue was $791.0 million, up 9% from the fourth quarter 2009.
Non-GAAP earnings per share* from continuing operations attributable to Diebold, net of tax, in the
fourth quarter 2010 were $.73 per share, up from $.29 per share in the fourth quarter 2009.
Business Review
Management commentary
Diebold delivered significant growth in revenue and generated more than $200 million in free cash
flow* during the fourth quarter, said Thomas W. Swidarski, Diebold president and chief executive
officer. In addition, our financial self-service orders in North America grew substantially as
that market continues to recover and demand for our deposit automation solutions increases in the
regional bank space.
We are also seeing good progress in other key markets around the world, especially in Latin
America and Asia Pacific where customer acceptance of our solutions is growing, Swidarski
continued. Europe, however, remains a challenging market for us. While Europe has never been a
large market for the company, it is strategically important as we consider the global nature of our
customer base. Therefore, we are taking decisive actions to re-engineer our infrastructure to free
up more resources in core markets where we can compete most effectively. With the right focus and
business model in place, we will improve our global competitiveness and achieve sustainable
profitability in the region. This is a key priority in 2011.
* See accompanying notes for non-GAAP measures.
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PAGE 2/ DIEBOLD REPORTS 2010 FOURTH QUARTER FINANCIAL RESULTS
Swidarski concluded, As we progress through 2011, I am encouraged by the many opportunities that
lie before us. We will continue to step up our investment in developing new solutions in the
software and services arena such as several significant software wins we announced in the past
year. In addition, we will continue to invest in our enterprise security business as we build off
the success we had in 2010 in winning major projects.
Bradley C. Richardson, Diebold executive vice president and chief financial officer, said, I am
pleased to report we have remediated our remaining material weaknesses as we continue to make
improvements in our financial control environment. I am also pleased with the progress we made on
improving our working capital, which resulted in exceptional free cash flow for the year and
enabled us to finish the year in a net investment position. Moving forward, we will continue to
drive a keen focus on return on capital employed throughout the organization, which will further
enhance our ability to invest in future growth opportunities and return cash to shareholders in the
form of dividends and share repurchases.
Fourth Quarter Orders (constant currency)
Total global product and services orders decreased 12% compared with the prior-year period.
However, global orders increased 7% during the quarter excluding Brazil, where the voting
equipment contract and the large ATM order from Bradesco created a difficult comparison to the
prior-year period. North America orders benefitted from particularly strong financial self-service
growth in the regional bank space. Orders in EMEA decreased 12%.
Orders by Solution (Q4 2010 vs. Q4 2009) | % Change | |||
Financial self-service solutions |
-12 | % | ||
Security solutions |
-0.5 | % | ||
Total FSS & security |
-10 | % | ||
Brazil election systems & lottery |
-29 | % | ||
Total Global Order Entry |
- 12 | % |
Orders by Geography (Q4 2010 vs. Q4 2009) | % Change | |||
Diebold North America |
14 | % | ||
Total Diebold International |
-25 | % | ||
Latin America (incl. Brazil) |
-40 | % | ||
Asia Pacific |
10 | % | ||
Europe, Middle East, and Africa |
-12 | % | ||
Total Global Order Entry |
-12 | % |
* See accompanying notes for non-GAAP measures.
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PAGE 3/ DIEBOLD REPORTS 2010 FOURTH QUARTER FINANCIAL RESULTS
Results of Operations
Profit/loss summary 4th quarter comparison (Dollars in millions)
Q4 2010 | Q4 2009 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Gross | % of | % of | Gross | % of | % of | ||||||||||||||||||||||||||||||||||||||||||||||
Rev | Profit | Sales | OPEX | OP | Sales | Rev | Profit | Sales | OPEX | OP | Sales | ||||||||||||||||||||||||||||||||||||||||
$791.0 |
$ | 189.5 | 24.0 | % | $ | 331.1 | ($141.6 | ) | -17.9 | % | GAAP Results | $ | 724.9 | $ | 176.6 | 24.4 | % | $ | 148.2 | $ | 28.3 | 3.9 | % | ||||||||||||||||||||||||||||
1.1 | (0.3 | ) | 1.4 | Restructuring | 5.8 | (9.2 | ) | 15.0 | |||||||||||||||||||||||||||||||||||||||||||
| (16.7 | ) | 16.7 | Non-rout. Exp | | (0.1 | ) | 0.1 | |||||||||||||||||||||||||||||||||||||||||||
| | | Non-rout. Inc | | | | |||||||||||||||||||||||||||||||||||||||||||||
| (168.8 | ) | 168.8 | Impairment | | (2.5 | ) | 2.5 | |||||||||||||||||||||||||||||||||||||||||||
$791.0 |
$ | 190.6 | 24.1 | % | $ | 145.4 | $ | 45.2 | 5.7 | % | Non-GAAP Results | $ | 724.9 | $ | 182.3 | 25.2 | % | $ | 136.4 | $ | 46.0 | 6.3 | % | ||||||||||||||||||||||||||||
Profit/loss summary full-year comparison (Dollars in millions)
2010 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Gross | % of | % of | Gross | % of | % of | |||||||||||||||||||||||||||||||||||||||||
Rev | Profit | Sales | OPEX | OP | Sales | Rev | Profit | Sales | OPEX | OP | Sales | |||||||||||||||||||||||||||||||||||
$2,823.8
|
$ | 719.6 | 25.5 | % | $ | 721.4 | ($1.8 | ) | -0.1 | % | GAAP Results | $ | 2,718.3 | $ | 650.0 | 23.9 | % | $ | 499.4 | $ | 150.6 | 5.5 | % | |||||||||||||||||||||||
1.7 | (2.5 | ) | 4.2 | Restructuring | 12.8 | (12.4 | ) | 25.2 | ||||||||||||||||||||||||||||||||||||||
| (20.4 | ) | 20.4 | Non-rout. Exp | | (1.5 | ) | 1.5 | ||||||||||||||||||||||||||||||||||||||
| 4.1 | (4.1 | ) | Non-rout. Inc | | 11.3 | (11.3 | ) | ||||||||||||||||||||||||||||||||||||||
| (175.8 | ) | 175.8 | Impairment | | (2.5 | ) | 2.5 | ||||||||||||||||||||||||||||||||||||||
$2,823.8
|
$ | 721.3 | 25.5 | % | $ | 526.8 | $ | 194.5 | 6.9 | % | Non-GAAP Results | $ | 2,718.3 | $ | 662.8 | 24.4 | % | $ | 494.4 | $ | 168.4 | 6.2 | % | |||||||||||||||||||||||
The companys management believes excluding restructuring charges, non-routine expenses and
income and impairment charges from operating margins is an indication of the companys baseline
performance. The exclusion of these items permits evaluation and comparison of results for the
companys core business operations and it is on this basis that the companys management internally
assesses the companys performance.
Revenue
Total revenue for the fourth quarter 2010 was up 9%, including a net positive currency impact of
less than 1%. Revenue grew in every region of the world, ranging from 3% in EMEA to 19% in Latin
America. Full-year 2010 revenue was up 4%, including a net positive currency impact of 3%.
Gross Margin
Total gross margin for the fourth quarter 2010 was 24.0%, a decrease of 0.4 percentage points from
the fourth quarter of 2009. Total gross margin included restructuring charges of $1.1 million in
the fourth quarter of 2010 and $5.8 million in the fourth quarter of 2009. Full-year 2010 gross
margin was 25.5%, an increase of 1.6 percentage points from 2009. Total gross margin included
restructuring charges of $1.7 million in 2010 and $12.8 million in 2009.
Operating Expenses
Total operating expenses as a percentage of revenue for the fourth quarter 2010 was 41.9%, an
increase of 21.5 percentage points from the fourth quarter of 2009. Operating expenses in the
fourth quarter 2010 included a net $0.3 million of restructuring charges, which includes a gain on
a real estate sale of $0.9 million. Non-routine expenses of $16.7 million include $9.8 million for
the settlement and legal fees related to a previously disclosed employment class-action lawsuit and
$6.9 million in higher legal, consultative, audit and severance costs related to the previously
disclosed Foreign Corrupt Practices Act (FCPA) investigation. Also included in the fourth quarter
2010 operating expenses is a non-cash goodwill impairment charge of approximately $169 million
pre-tax, associated with the companys EMEA business.
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PAGE 4/ DIEBOLD REPORTS 2010 FOURTH QUARTER FINANCIAL RESULTS
Operating expenses in the fourth quarter of 2009 included $9.2 million in restructuring charges
related to the U.S. workforce reduction, non-routine expense of $0.1 million and a non-cash
impairment charge of $2.5 million related to the write-off of an intangible asset associated with
the discontinuation of the brand name Firstline Inc. Total operating expense as a percentage of
revenue for full-year 2010 was 25.5%, an increase of 7.1 percentage points from the same period of
2009.
Operating Profit
Operating margin was (17.9%) of net sales in the fourth quarter 2010, a decrease of 21.8 percentage
points from the fourth quarter 2009. The fourth quarter 2010 included net restructuring,
non-routine expenses, and impairment charges of $186.9 million, and fourth quarter 2009 included
net restructuring, non-routine expenses & income, and impairment charges of $17.6 million.
Excluding these items from both periods, non-GAAP operating profit* in fourth quarter 2010 was
$45.2 million or 5.7% of sales and $46.0 million or 6.3% of sales in the fourth quarter 2009.
Full-year 2010 operating loss was (0.1%) of revenue, a decrease of 5.6 percentage points from the
comparable period of 2009. Excluding net restructuring, non-routine expenses & income, and
impairment charges, full-year non-GAAP operating profit* was 6.9%, an increase of 0.7 percentage
points from the prior year.
Income from Continuing Operations, net of tax (attributable to Diebold)
Loss from continuing operations, net of tax, was ($119.9) million, or (15.2%) of revenue in the
fourth quarter 2010, a decrease of 16.3 percentage points from the fourth quarter 2009. Included
in the fourth quarter 2010 results are restructuring charges net of tax of $1.2 million and $167.5
million in net non-routine and impairment charges. Income from continuing operations in the fourth
quarter 2009 included restructuring charges, net of tax, of $9.8 million.
Full-year 2010 loss from continuing operations, net of tax, was ($20.5) million, or (0.7%) of
revenue, and $73.1 million, or 2.7% of revenue, in the comparable period of 2009. Full-year 2010
income from continuing operations, net of tax, includes after-tax restructuring charges of $3.3
million and $172.3 million in net non-routine and impairment charges. Full-year 2009 income from
continuing operations, net of tax, includes the $25 million reserve related to the agreement in
principle with the staff of the SEC, $8.2 million in expense recovery and reimbursement from the
companys D&O insurance carriers, as well as after-tax restructuring charges of $17.4 million and
$2.7 million in non-routine and impairment charges.
Taxes on Income from continuing operations attributable to Diebold
Fourth quarter taxes on loss from continuing operations attributable to Diebold were ($23.8)
million. Year-to-date taxes on loss from continuing operations were $14.6 million. The goodwill
impairment charge reduced the fourth quarter taxes by $15.4 million. The fourth quarter taxes also
included a benefit of approximately $10 million as a result of tax planning in Latin America and
improved profitability in the companys core Brazilian operations. In Brazil, improved operating
results, combined with a more favorable outlook for business in that country, triggered the release
of a tax reserve on deferred tax assets. The taxes also included a favorable impact from the
reinstatement of the research and development credit in the United States.
* See accompanying notes for non-GAAP measures.
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PAGE 5/ DIEBOLD REPORTS 2010 FOURTH QUARTER FINANCIAL RESULTS
Balance Sheet, Cash Flow and Liquidity
The companys net investment* was $35.1 million at December 31, 2010, an increase of $100.5 million
from the net debt* position at December 31, 2009. The companys net debt to capital ratio was -4%
at December 31, 2010, and 6% at December 31, 2009.
For the full-year 2010, net cash provided by operating activities was $273.4 million, a decrease of
$23.5 million from December 31, 2009. Free cash flow* in the fourth quarter 2010 was $209.0
million, an increase of $49.0 million from the fourth quarter 2009. For the full-year 2010, free
cash flow* was $222.1 million, a decrease of $30.5 million from the full-year of 2009.
In the fourth quarter 2010, Diebold repurchased 30,000 of its common shares for about $1 million
under its repurchase plan. For the full-year 2010, Diebold repurchased 803,449 shares of its common
shares for approximately $24.4 million under its repurchase plan.
Share repurchase authorization
In addition, on February 9, the board of directors authorized the company to repurchase up to an
additional 1.9 million common shares of its stock. This new authorization is in addition to the
approximately 2.1 million shares remaining under its existing board authorization. Diebold plans
to opportunistically repurchase these shares as a means of returning cash to its shareholders.
Restructuring, non-routine expenses and income, impairment charges and discontinued
operations
The company incurred net restructuring charges of $.02 per share in the fourth quarter of 2010.
The majority of these charges were related to severance costs from the previously announced
reorganization of the companys North America and corporate functions, and the continued strategic
realignment of the companys global manufacturing. These items were partially offset by a pre-tax
gain on a sale of real estate associated with the global manufacturing realignment. In the fourth
quarter 2009, restructuring charges net of tax were $9.8 million, or $0.15 per share. These
charges were largely related to an accrual for severance costs associated with the reorganization
of the companys North America and corporate functions.
The company also recorded a non-cash goodwill impairment charge of approximately $169 million
pre-tax, which represents all of the goodwill associated with the companys EMEA business. Due to
the operational challenges experienced in the EMEA region over the past few quarters, and the
negative business impact related to potential FCPA compliance issues within the region, management
has reduced its near-term earnings outlook for the EMEA business unit.
Full-year 2010 restructuring charges net of tax were $3.3 million, or $0.05 per share, compared
with full-year 2009 restructuring charges net of tax of $17.4 million, or $0.27 per share.
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PAGE 6/ DIEBOLD REPORTS 2010 FOURTH QUARTER FINANCIAL RESULTS
Foreign Corrupt Practices Act review
As previously disclosed, Diebold is conducting a global internal review of its compliance with the
U.S. Foreign Corrupt Practices Act (FCPA). During its review in the fourth quarter, the company
identified certain transactions within its Asia Pacific operation which may potentially implicate
the FCPA. The companys assessment indicates that the transactions in question do not materially
impact or alter the companys condensed consolidated financial statements. The company also
previously disclosed it had received a subpoena for documents from the SEC and a voluntary request
for documents from the DOJ in connection with the SECs non-public investigation of the FCPA
matter. Diebold continues to cooperate with these agencies in their review.
As a result of the internal review progressing to more complex operations located in broader
geographies, as well as complying with requests from regulators, costs associated with the FCPA
review increased substantially in the fourth quarter. The company has decided to exclude these
costs from its non-GAAP operating results as it provides a better overall understanding of the
companys historical financial performance and future prospects. Diebold will continue to conduct
its global internal FCPA compliance review. The company cannot predict the length, scope or results
of this review or the government investigations, or the impact, if any, on its results of
operations.
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 |
Current Guidance | ||
Total revenue
|
3% to 6% | |
Financial self-service
|
5% to 8% | |
Security
|
4% to 7% | |
Brazil election sys. / lottery
|
$90 million to $100 million |
| Earnings per share |
Current Guidance | ||
2011 EPS (GAAP)
|
$1.66 $1.92 | |
Restructuring charges
|
.12 .09 | |
Non-routine exp.
|
.22 .19 | |
2011 EPS non-GAAP* | $2.00 $2.20 |
Overview presentation and conference call
More information on Diebolds quarterly earnings, including additional financial analysis and an
earnings overview presentation, is available on Diebolds Investor Relations website. Thomas W.
Swidarski and Bradley C. Richardson will discuss the companys 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 7/ DIEBOLD REPORTS 2010 FOURTH QUARTER FINANCIAL RESULTS
Revenue Summary by Product, Service and Geographic Area
Revenue Summary by Product and Service Solutions
(In Thousands )
Q4 2010 | Q4 2009 | % Change | FY 12/31/2010 | FY 12/31/2009 | % Change | |||||||||||||||||||
Financial Self-Service |
||||||||||||||||||||||||
Products |
$ | 314,693 | $ | 263,255 | 20 | % | $ | 959,820 | $ | 985,275 | -3 | % | ||||||||||||
Services |
280,264 | 285,600 | -2 | % | 1,086,569 | 1,083,875 | 0 | % | ||||||||||||||||
Total Fin. self-service |
594,957 | 548,855 | 8 | % | 2,046,389 | 2,069,150 | -1 | % | ||||||||||||||||
Security solutions |
||||||||||||||||||||||||
Products |
73,969 | 70,516 | 5 | % | 223,514 | 247,518 | -10 | % | ||||||||||||||||
Services |
108,587 | 103,990 | 4 | % | 406,831 | 396,071 | 3 | % | ||||||||||||||||
Total Security |
182,556 | 174,506 | 5 | % | 630,345 | 643,589 | -2 | % | ||||||||||||||||
Total Fin. self-service & security |
777,513 | 723,361 | 7 | % | 2,676,734 | 2,712,739 | -1 | % | ||||||||||||||||
Election Systems & Lottery |
||||||||||||||||||||||||
Products |
13,482 | 1,562 | n/m | 147,034 | 5,553 | n/m | ||||||||||||||||||
Services |
| | 0 | % | 25 | | 0 | % | ||||||||||||||||
Total Election Systems &
Lottery |
13,482 | 1,562 | n/m | 147,059 | 5,553 | n/m | ||||||||||||||||||
Total Revenue |
$ | 790,994 | $ | 724,923 | 9 | % | $ | 2,823,793 | $ | 2,718,292 | 4 | % | ||||||||||||
Revenue Summary by Geographic Segment
FY | FY | |||||||||||||||||||||||
Q4 2010 | Q4 2009 | % Change | 12/31/2010 | 12/31/2009 | % Change | |||||||||||||||||||
Diebold North America |
$ | 352,074 | $ | 338,962 | 4 | % | $ | 1,320,581 | $ | 1,382,461 | -4 | % | ||||||||||||
Diebold International |
||||||||||||||||||||||||
Latin America (incl. Brazil) |
196,714 | 164,791 | 19 | % | 770,691 | 602,549 | 28 | % | ||||||||||||||||
Asia Pacific |
123,721 | 106,357 | 16 | % | 380,970 | 387,119 | -2 | % | ||||||||||||||||
Europe, Middle East, Africa |
118,485 | 114,813 | 3 | % | 351,551 | 346,163 | 2 | % | ||||||||||||||||
Total Diebold International |
438,920 | 385,961 | 14 | % | 1,503,212 | 1,335,831 | 13 | % | ||||||||||||||||
Total Revenue |
$ | 790,994 | $ | 724,923 | 9 | % | $ | 2,823,793 | $ | 2,718,292 | 4 | % | ||||||||||||
Other income/(expense), net summary:
Q4 2010 | Q4 2009 | FY 12/31/10 | FY 12/31/09 | |||||||||||||
Other income/(expense) |
$ | 32 | $ | 4,668 | $ | 4,048 | ($19,427 | ) | ||||||||
Foreign ex. gain/(loss), net |
(1,535 | ) | 2,136 | (1,301 | ) | (922 | ) | |||||||||
Interest expense |
(9,900 | ) | (9,484 | ) | (37,887 | ) | (35,452 | ) | ||||||||
Investment income |
10,569 | 7,845 | 34,545 | 29,016 | ||||||||||||
Total other income / (expense), net |
($834 | ) | $ | 5,165 | ($595 | ) | ($26,785 | ) |
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PAGE 8/ DIEBOLD REPORTS 2010 FOURTH QUARTER FINANCIAL RESULTS
Notes for Non-GAAP Measures
1. | Reconciliation of diluted GAAP EPS to non-GAAP EPS from continuing operations measures: |
Q4 2010 | Q4 2009 | FY 12/31/10 | FY 12/31/09 | |||||||||||||
Total EPS from continuing
operations (GAAP measure) |
($1.83 | ) | $ | 0.12 | ($0.31 | ) | $ | 1.09 | ||||||||
Restructuring charges |
0.02 | 0.15 | 0.05 | 0.27 | ||||||||||||
Non-routine expenses |
0.21 | | 0.25 | 0.39 | ||||||||||||
Non-routine income |
| | (0.05 | ) | (0.12 | ) | ||||||||||
Impairment |
2.33 | 0.02 | 2.38 | 0.02 | ||||||||||||
Total EPS (non-GAAP measure) |
$ | 0.73 | $ | 0.29 | $ | 2.33 | $ | 1.65 | ||||||||
Prior-year tax adjustments |
$ | 0.13 | $ | 0.13 |
The sums of the quarterly figures do not equal year-to-date figures due to rounding or differences in the weighted-average number of shares outstanding during the respective periods. Included within the impairment for the quarter and year ended December 31, 2010, is an additional EPS impact of $.03 and $.01 respectively, related to shares that are excluded from the EPS GAAP measure. |
The companys management believes excluding restructuring charges, non-routine expenses and income and impairment charges is useful to investors because it provides an overall understanding of the companys historical financial performance and future prospects. Management believes non-GAAP EPS from continuing operations is an indication of the companys base-line performance. Exclusion of these items permits evaluation and comparison of results for the companys core business operations, and it is on this basis that management internally assesses the companys performance. The non-GAAP EPS does not include the impact of the prior year tax adjustments. |
2. | Free cash flow is calculated as follows: |
Q4 2010 | Q4 2009 | FY 12/31/10 | FY 12/31/09 | |||||||||||||
Net cash provided by operating
activities (GAAP measure) |
$ | 222,280 | $ | 175,879 | $ | 273,353 | $ | 296,882 | ||||||||
Capital expenditures |
(13,307 | ) | (15,873 | ) | (51,298 | ) | (44,287 | ) | ||||||||
Free cash flow (non-GAAP measure) |
$ | 208,973 | $ | 160,006 | $ | 222,055 | $ | 252,595 |
The companys 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:
12/31/2010 | 12/31/2009 | 9/30/2010 | ||||||||||
Cash, cash
equivalents and
short-term
investments (GAAP
measure) |
$ | 601,781 | $ | 505,868 | $ | 435,277 | ||||||
Debt instruments |
(566,632 | ) | (571,204 | ) | (609,667 | ) | ||||||
Net Investment (debt) (non-GAAP
measure) |
$ | 35,149 | $ | (65,336 | ) | $ | (174,390 | ) |
The companys management believes that given the net debt, the significant cash, cash equivalents and other investments on its balance sheet that to net cash against outstanding debt is a meaningful debt calculation. |
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PAGE 9/ DIEBOLD REPORTS 2010 FOURTH QUARTER FINANCIAL RESULTS
4. | Reconciliation of GAAP Operating Margin to non-GAAP measures |
Q4 2010 | Q4 2009 | FY 12/31/2010 | FY 12/31/2009 | |||||||||||||
GAAP Operating Profit |
$ | (141,621 | ) | $ | 28,338 | $ | (1,802 | ) | $ | 150,592 | ||||||
GAAP Operating Profit % |
-17.9 | % | 3.9 | % | -0.1 | % | 5.5 | % | ||||||||
Restructuring |
1,391 | 14,975 | 4,183 | 25,203 | ||||||||||||
Non-routine Expenses |
16,714 | 139 | 20,382 | 1,467 | ||||||||||||
Non-routine Income |
| | (4,148 | ) | (11,323 | ) | ||||||||||
Impairment |
168,753 | 2,500 | 175,849 | 2,500 | ||||||||||||
Non GAAP Operating Margin |
$ | 45,237 | $ | 45,952 | $ | 194,464 | $ | 168,439 | ||||||||
Non GAAP Operating Margin % |
5.7 | % | 6.3 | % | 6.9 | % | 6.2 | % |
The companys management believes excluding restructuring charges, non-routine expenses and income and impairment charges from operating margins is an indication of the companys baseline performance. The exclusion of these items permits evaluation and comparison of results for the companys core business operations and it is on this basis that the companys management internally assesses the companys 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 companys future operating performance, the companys
share of new and existing markets, the companys short- and long-term revenue and earnings growth
rates, and the companys implementation of cost-reduction initiatives and measures to improve
pricing, including the optimization of the companys 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 companys 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 companys operations, including Brazil, where a significant portion of the companys revenue is derived; |
| the companys ability to take actions to mitigate the effect of the Venezuelan currency devaluation, further devaluation, actions of the Venezuelan government, and economic conditions in Venezuela; |
| the continuing effects of the recent 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; |
-more-
PAGE 10/ DIEBOLD REPORTS 2010 FOURTH QUARTER FINANCIAL RESULTS
| acceptance of the companys product and technology introductions in the marketplace; | |
| the companys ability to maintain effective internal controls; | |
| changes in the companys 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 companys 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 companys common shares, if any; | |
| the outcome of the companys global FCPA review and any actions taken by government agencies in connection with the companys self disclosure, including the pending SEC investigation; and | |
| the companys 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 approximately 16,000 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
companys website at www.diebold.com.
###
PR/xxxx
DIEBOLD, INCORPORATED
CONDENSED CONSOLIDATED INCOME STATEMENTS UNAUDITED
CONDENSED CONSOLIDATED INCOME STATEMENTS UNAUDITED
(IN THOUSANDS EXCEPT EARNINGS PER SHARE)
Three months ended | Twelve months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net Sales |
||||||||||||||||
Product |
$ | 402,143 | $ | 335,333 | $ | 1,330,368 | $ | 1,238,346 | ||||||||
Service |
388,851 | 389,590 | 1,493,425 | 1,479,946 | ||||||||||||
Total |
790,994 | 724,923 | 2,823,793 | 2,718,292 | ||||||||||||
Cost of goods |
||||||||||||||||
Product |
310,162 | 254,951 | 1,003,923 | 944,090 | ||||||||||||
Service |
291,315 | 293,418 | 1,100,305 | 1,124,202 | ||||||||||||
Total |
601,477 | 548,369 | 2,104,228 | 2,068,292 | ||||||||||||
Gross Profit |
189,517 | 176,554 | 719,565 | 650,000 | ||||||||||||
Percent of net sales |
24.0 | % | 24.4 | % | 25.5 | % | 23.9 | % | ||||||||
Operating expenses |
||||||||||||||||
Selling, general and administrative |
142,100 | 123,893 | 471,293 | 424,882 | ||||||||||||
Research, development and engineering |
20,285 | 21,823 | 74,225 | 72,026 | ||||||||||||
Impairment of assets |
168,753 | 2,500 | 175,849 | 2,500 | ||||||||||||
Total |
331,138 | 148,216 | 721,367 | 499,408 | ||||||||||||
Percent of net sales |
41.9 | % | 20.4 | % | 25.5 | % | 18.4 | % | ||||||||
Operating (loss) profit |
(141,621 | ) | 28,338 | (1,802 | ) | 150,592 | ||||||||||
Percent of net sales |
-17.9 | % | 3.9 | % | -0.1 | % | 5.5 | % | ||||||||
Other income / (expense), net |
(834 | ) | 5,165 | (595 | ) | (26,785 | ) | |||||||||
(Loss) / Income from continuing operations before taxes |
(142,455 | ) | 33,503 | (2,397 | ) | 123,807 | ||||||||||
Taxes on income |
23,798 | (23,520 | ) | (14,561 | ) | (44,477 | ) | |||||||||
(Loss) / Income from continuing operations |
(118,657 | ) | 9,983 | (16,958 | ) | 79,330 | ||||||||||
(Loss) / Income from discontinued operations net of tax |
(115 | ) | (1,042 | ) | 275 | (9,884 | ) | |||||||||
Loss on sale of discontinued operations net of tax |
| (5,754 | ) | | (37,192 | ) | ||||||||||
Net (Loss) / Income |
(118,772 | ) | 3,187 | (16,683 | ) | 32,254 | ||||||||||
Less: Net Income attrib to noncontrol interest |
(1,240 | ) | (2,084 | ) | (3,569 | ) | (6,228 | ) | ||||||||
Net (Loss) / Income attributable to Diebold, Inc. |
$ | (120,012 | ) | $ | 1,103 | $ | (20,252 | ) | $ | 26,026 | ||||||
Basic weighted average shares outstanding |
65,686 | 66,318 | 65,907 | 66,257 | ||||||||||||
Diluted weighted average shares outstanding |
65,686 | 67,057 | 65,907 | 66,867 | ||||||||||||
Basic Earnings Per Share: |
||||||||||||||||
(Loss) / Income from continuing operations |
$ | (1.83 | ) | $ | 0.12 | $ | (0.31 | ) | $ | 1.10 | ||||||
(Loss) / Income from discontinued operations |
(0.00 | ) | (0.10 | ) | 0.00 | (0.71 | ) | |||||||||
Net (Loss) / Income |
$ | (1.83 | ) | $ | 0.02 | $ | (0.31 | ) | $ | 0.39 | ||||||
Diluted Earnings Per Share: |
||||||||||||||||
(Loss) / Income from continuing operations |
$ | (1.83 | ) | $ | 0.12 | $ | (0.31 | ) | $ | 1.09 | ||||||
(Loss) / Income from discontinued operations |
(0.00 | ) | (0.10 | ) | 0.00 | (0.70 | ) | |||||||||
Net (Loss) / Income |
$ | (1.83 | ) | $ | 0.02 | $ | (0.31 | ) | $ | 0.39 | ||||||
Amounts Attributable to Diebold, Inc.
|
||||||||||||||||
(Loss) / Income from continuing operations net of tax |
$ | (119,897 | ) | $ | 7,899 | $ | (20,527 | ) | $ | 73,102 | ||||||
(Loss) / Income from discontinued operations |
(115 | ) | (6,796 | ) | 275 | (47,076 | ) | |||||||||
Net (Loss) / Income attributable to Diebold, Inc. |
$ | (120,012 | ) | $ | 1,103 | $ | (20,252 | ) | $ | 26,026 | ||||||
DIEBOLD, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 328,658 | $ | 328,426 | ||||
Short-term investments |
273,123 | 177,442 | ||||||
Trade receivables, net |
404,501 | 330,982 | ||||||
Inventories |
444,575 | 448,243 | ||||||
Other current assets |
263,179 | 302,992 | ||||||
Total current assets |
1,714,036 | 1,588,085 | ||||||
Securities and other investments |
76,138 | 73,989 | ||||||
Property, plant and equipment, net |
203,462 | 204,820 | ||||||
Goodwill |
269,398 | 450,937 | ||||||
Other assets |
256,756 | 237,034 | ||||||
Total assets |
$ | 2,519,790 | $ | 2,554,865 | ||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities |
||||||||
Notes payable |
$ | 15,038 | $ | 16,915 | ||||
Accounts payable |
214,288 | 147,496 | ||||||
Other current liabilities |
580,439 | 578,680 | ||||||
Total current liabilities |
809,765 | 743,091 | ||||||
Long-term debt |
550,368 | 553,008 | ||||||
Long-term liabilities |
169,843 | 186,740 | ||||||
Total Diebold, Inc. shareholders equity |
961,155 | 1,046,379 | ||||||
Noncontrolling Interests |
28,659 | 25,647 | ||||||
Total equity |
989,814 | 1,072,026 | ||||||
Total liabilities and equity |
$ | 2,519,790 | $ | 2,554,865 | ||||
DIEBOLD, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED
(IN THOUSANDS)
Twelve months ended December 31, | ||||||||
2010 | 2009 | |||||||
Cash flow from operating activities: |
||||||||
Net (loss) income |
$ | (16,683 | ) | $ | 32,254 | |||
Adjustments to reconcile net (loss) income to cash provided by operating activities: |
||||||||
Sale of discontinued operations |
| 37,192 | ||||||
Devaluation on Venezuelan balance sheet |
5,148 | | ||||||
Depreciation and amortization |
79,253 | 77,693 | ||||||
Impairment of assets |
175,849 | 2,500 | ||||||
Other |
(40,307 | ) | 59,520 | |||||
Cash (used in) provided by changes
in certain assets and liabilities: |
||||||||
Trade receivables |
(69,377 | ) | 123,400 | |||||
Inventories |
3,136 | 76,001 | ||||||
Accounts payable |
65,768 | (54,193 | ) | |||||
Certain other assets and liabilities |
70,566 | (57,485 | ) | |||||
Net cash provided by operating activities |
273,353 | 296,882 | ||||||
Cash flow from investing activities: |
||||||||
Proceeds from sale of discontinued operations |
1,815 | 9,908 | ||||||
Payments for acquisitions, net of cash acquired |
| (5,364 | ) | |||||
Net investment activity |
(86,714 | ) | (20,510 | ) | ||||
Capital expenditures |
(51,298 | ) | (44,287 | ) | ||||
Increase in certain other assets & other |
(28,559 | ) | (30,525 | ) | ||||
Net cash used in investing activities |
(164,756 | ) | (90,778 | ) | ||||
Cash flow from financing activities: |
||||||||
Dividends paid |
(71,900 | ) | (69,451 | ) | ||||
Net borrowings / (repayments) |
(15,963 | ) | (56,917 | ) | ||||
Repurchase of common shares |
(24,386 | ) | | |||||
Other |
1,149 | (4,620 | ) | |||||
Net cash used in financing activities |
(111,100 | ) | (130,988 | ) | ||||
Effect of exchange rate changes on cash |
2,735 | 11,874 | ||||||
Increase in cash and cash equivalents |
232 | 86,990 | ||||||
Cash and cash equivalents at the beginning of the period |
328,426 | 241,436 | ||||||
Cash and cash equivalents at the end of the period |
$ | 328,658 | $ | 328,426 | ||||