Attached files
| file | filename |
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| 8-K - FORM 8-K - NCR CORP | d8k.htm |
| EX-99.1 - PRESS RELEASE - NCR CORP | dex991.htm |
 NCR to Acquire
Radiant Systems July 11, 2011
Bill Nuti –
Chairman & CEO, NCR
Bob Fishman –
CFO, NCR
John Heyman –
CEO, Radiant Systems
Andrew Heyman –
COO, Radiant Systems
Exhibit 99.2 |
 NCR
Confidential 1
Note to Investors
Comments made during this conference call and in the related presentation materials may
include forward-looking statements under the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are based on current expectations
and assumptions, and are subject to a number of risks and uncertainties that could cause actual
results to vary materially. These risks and uncertainties are detailed from time to time in
NCR’s and Radiant’s respective SEC reports, including, but not limited to,
Forms 10-Q, 10-K, 8-K and NCR’s and Radiant’s respective annual reports to
shareholders. Statements made during this conference call and in the related presentation
materials are made only as of the date of this event, and neither NCR nor Radiant
undertakes any obligation to publicly update or revise any such statements, whether as
a result of new information, future events or otherwise.
While NCR reports its results in accordance with generally accepted accounting principles in
the United States, or GAAP, in an effort to provide additional useful information
regarding NCR’s financial results, certain materials presented during this event
will include non-GAAP measures. NCR’s management evaluates NCR’s results excluding certain items, such as
pension expense, to assess the company’s financial performance, and believes this
information is useful for investors because it provides a more complete understanding
of NCR’s underlying operational performance, as well as consistency and
comparability with past reports of financial results. In addition, NCR management uses earnings per share excluding
these items to manage and determine effectiveness of its business managers and as a basis for
incentive compensation. The non-GAAP measures presented during this event should
not be considered as substitutes for, or superior to, results determined in accordance
with GAAP. A reconciliation of these non-GAAP measures to comparable GAAP measures and
other related information is included in the portion of these presentation materials entitled
“Non-GAAP Supplementary Materials” and is available on the Investor
Relations page of NCR’s website at www.ncr.com. Descriptions of many of
these non-GAAP measures, including free cash flow, also are included in NCR’s SEC
reports.
These charts and the associated remarks are integrally related and are intended to be
presented and
understood together.
|
 NCR
Confidential 2
Note to Investors (Continued)
This presentation (this “Presentation”) relates to a planned tender offer by
Radiant Acquisition Corporation (“Purchaser”), a wholly-owned subsidiary
of NCR Corporation (“NCR”), for all shares of outstanding common stock of Radiant, Inc.
(“Radiant”), to be commenced pursuant to an Agreement and Plan of Merger, dated as
of July 11, 2011, by and among NCR, Purchaser and Radiant. The tender
offer referred to in this Presentation has not yet commenced. This Presentation is neither an offer to purchase
nor a solicitation of an offer to sell any shares of Radiant. The solicitation and the offer
to buy shares of Radiant common stock will be made pursuant to an offer to purchase
and related materials that NCR and Purchaser intend to file with the U.S. Securities
and Exchange Commission (the “SEC”). At the time the tender offer is commenced, NCR and Purchaser
intend to file a Tender Offer Statement on Schedule TO containing an offer to purchase, a
form of letter of transmittal and other documents relating to the tender offer and
Radiant intends to file a Solicitation/Recommendation Statement on Schedule 14D-9
with respect to the tender offer. NCR, Purchaser and Radiant intend to mail these documents to the
shareholders of Radiant. These documents will contain important information about the tender
offer and shareholders of Radiant are urged to read them carefully when they become
available. Investors and shareholders of Radiant will be able to obtain a free copy of
these documents (when they become available) and other documents filed by NCR, Purchaser and
Radiant with the SEC at the website maintained by the SEC at www.sec.gov. In addition, the
tender offer statement and related materials may be obtained for free (when they
become available) by directing such requests to NCR at Attention: Investor Relations,
3097 Satellite Blvd, Duluth, GA 30096. Investors and shareholders of Radiant may obtain a free copy of
the solicitation/recommendation statement and other documents (when they become available)
from Radiant by directing requests to Radiant at Attention: Investor Relations, 3925
Brookside Parkway, Alpharetta, GA 30022. |
 NCR
Confidential 3
Alignment with NCR Corporate Strategy
NCR BUSINESS SYSTEM DRIVING A CONTINUOUS IMPROVEMENT CULTURE
Innovation provides the foundation for our strategy
Design to win (Dfx)
PLM
Lean Six Sigma
CRVE
EXPAND INTO EMERGING GROWTH INDUSTRY SEGMENTS
Healthcare
Entertainment
Travel and
Gaming
Telecom and
Technology
Financial
Services
Retail and
Hospitality
Expand and strengthen
geographic presence and
sales coverage
Penetrate adjacent single
and multichannel self-
service solution segments
Leverage Consumable BU Products and Innovations
NCR Services
NCR Services
Consulting
Consulting
-
-
Professional
Professional
Services
Services
–
–
Deployment
Deployment
Services
Services
–
–
Post
Post
Sales
Sales
Service
Service
&
&
Support
Support
–
–
Managed
Managed
Services
Services
Trusted
partner
to
the
customers
we
serve
Highest Productivity – Most Efficient and Effective –
Best Quality – Disruptive Cost |
 NCR
Confidential 4
Radiant Is an Ideal Strategic Fit for NCR
Radiant strengthens NCR’s business, financial and strategic profile
•
Adds a third core vertical: Hospitality and Specialty Retail
•
Substantially increases total available market
•
Improves growth and margin profile
•
Bolsters capabilities in software / SaaS
•
Significantly expands channel network and customer base
The combined company features multiple avenues to drive revenue growth and
•
Enables cross-selling of NCR’s solutions across the Hospitality and Specialty Retail
vertical •
Utilizes NCR’s global footprint to accelerate Radiant’s international growth
•
Leverages NCR’s assets and expertise in supply chain and back-office functions into a
new vertical
•
Complementary
business
model
and
geographic
proximity
will
drive
significant
efficiencies
operating efficiencies |
 NCR
Confidential 5
Transaction Overview
•
NCR to acquire 100% of the common stock of Radiant for $28.00 per share in cash
–
Equity purchase price of approximately $1.2 billion
–
Represents a 28% premium to Friday’s closing price of $21.95
•
The Boards of Directors of both companies have approved the transaction
•
NCR
is
entering
into
employment
and/or
retention
agreements
with
select
employees
•
Radiant executives and directors have entered into tender and voting agreements in
support of the transaction
•
Expected to be accretive to Non-GAAP earnings in 2012
•
Transaction utilizes NCR’s strong balance sheet and will be funded through a mix of new
debt and existing balance sheet cash
•
NCR
will
commence
the
tender
offer
on
or
before
July
25
th
with
an
expected
transaction
close in the third quarter, subject to regulatory approval |
 Radiant:
Hospitality Leader with Attractive Growth Potential •
Founded in 1985 and headquartered in Alpharetta, GA
•
#1 Hospitality
provider
in
the
U.S.
(1)
–
Quick
service,
table service and fast, casual restaurants
•
Leader
in
retail
point-of-sale
for
specialty
&
convenience retail and sports & entertainment
•
Rapidly growing subscription-based services
•
More than 100,000 active installations worldwide
•
Blue-chip customer base includes:
Large Footprint in Hospitality and Retail
Demonstrated Track Record
Leader in Large, Fragmented Market Segments
($’s in Millions)
$51
$71
$82
$109
$132
$147
$121
$152
$171
$193
$155
$199
$172
$222
$253
$302
$287
$346
41%
44%
44%
43%
47%
46%
2005
2006
2007
2008
2009
2010
Recurring Revenue
Other Revenue
Gross Margin
Revenue CAGR: 15%
(1)
Source: Chain Store Guide’s Database of Foodservice Technology
Hospitality
Retail
6%
Rest of
Market
94%
2%
Rest of
Market
98%
$3.5 billion
570,000
$4.5 billion
1,000,000
Global tech
spend:
U.S. sites:
NCR Confidential
6 |
 NCR
Confidential 7
Operate
Measure
Manage
Market
Software-Driven Business Models –
NCR and Radiant
Radiant: Full Suite of Solutions
•
Point-of-sale (POS)
–
Hardware and software-based site
management solutions
–
POS, self-service kiosks and back-office systems and
software
–
Touch-screen terminals, servers, handheld devices and
peripherals
•
Subscription, maintenance and transaction services
–
SaaS / hosted model for delivering site management
software solutions
–
Customer support, software support and transaction
payment processing services
•
Professional services
–
design, implementation and
integration
Radiant: Growing SaaS Penetration
NCR’s Software-Driven Business Model
Radiant: Evolving Suite Delivers Customer Value
Restaurant
Guard
Radiant Payment
Services
Security Services
Insight
Smart Alerts
Command
Center
Loyalty
Stored Value
Online Sales
Customer Connect
Social Marketing
NCR APTRA™
Mobile Banking
Digital
Signage
Digital
Download
Proactive
Travel
Management
Software as
a Service
(SaaS)
e-Commerce
CRM
Integration
Online and
Mobile Bill
Pay
Recurring Revenues
Online
Text
Mobile
Web
Mobile App
(# of Sites in Thousands)
38
58
66
94
105
117
2005
2006
2007
2008
2009
2010
17%
8%
20%
21%
33%
58%
Radiant Sites
%
SaaS Penetration |
 Enhancing
NCR’s Business Profile Products
50%
Professional &
Installation Services
12%
Support
Services
38%
Systems
47%
Maintenance &
Transaction Services
31%
Professional Services
11%
Products
50%
Professional &
Installation Services
14%
Support
Services
36%
International
68%
U.S.
32%
U.S.
84%
International
16%
U.S.
36%
International
64%
Financial
Services
65%
Retail &
Hospitality
21%
Emerging Industries
14%
Hospitality
61%
Retail, S&E
31%
International
9%
Financial
Services
59%
Retail &
Hospitality
19%
10%
Emerging
Industries
13%
Subscription Services
12%
Operating
Income:
$333mm
(1)
Operating
Income:
$41mm
(2)
Operating
Income:
$374mm
(3)
Revenue: $346mm
Revenue: $5,165mm
Revenue: $4,819mm
Note: Based on NCR and Radiant 2010 metrics; products & solutions and geography illustrate
revenue contribution; industry verticals illustrate positive segment operating income
contribution; excludes synergies
(1)
% Contribution excludes Entertainment segment as it has operating loss of ($50) million
(2)
Operating income includes stock-based compensation of $5mm; % contribution excludes
Indirect Corporate operating costs of ($39) million (3)
•5.4% Revenue growth
•
24.0% Gross margin
•
7.2% NPOI margin
NCR Confidential
Financial
Profile
•
4.5% Revenue growth
•
22.4% Gross margin
•
6.9% NPOI margin
•
20.5% Revenue growth
•
46.1% Gross margin
•
11.8% OI margin
Products &
Solutions
Geography
Industry
Verticals
8 |
 Expanded
Leadership Position in Self-Service and POS Financial
Services
Retail
Hospitality &
Specialty
Retail
Entertainment
Emerging
Industries
Business
Highlights
#1 in banking
ATMs
#1 supplier of
multivendor
ATM
middleware
applications
#1 in retail self-
checkout
Leader in retail
point-of-sale
6 of top 10
theatre circuits
#1 hospitality
provider in the
U.S.
6 of top 10
fastest growing
chains
#2 DVD kiosk
operator in the
U.S.
#1 in U.S.
hospital patient
self-check-in
Five of top six
U.S. airlines use
NCR self-check-in
Key Products &
Services
Customers
NCR Confidential
9 |
 NCR
Confidential 10
Compelling Value Creation Opportunity
Revenue Synergies
•
Accelerate NCR’s growth in Hospitality and
Specialty Retail
•
Cross-sell NCR’s platform of products and
services into Radiant’s existing customer base
•
Leverage NCR’s global footprint to accelerate
Radiant’s international growth
•
Enhance existing NCR solutions through addition
of Radiant’s software capabilities
•
Leverage NCR’s scale and brand
Cost Synergies
•
Integration of services business
•
Drive efficiencies in administrative functions
across the combined company
•
Scale efficiencies throughout the supply chain
•
Leverage R&D best practices
•
Significant upside from cross-
selling, geographic and
technology revenue synergy
opportunities
•
Expect $20 -
$30 million of
pre-tax cost synergies in
2012
•
Annualized pre-tax cost
synergies of approximately
$40 -
$50 million to be
realized over three years
•
One-time restructuring cost
of approximately $35 -
$45
million |
 NCR
Confidential 11
Financing Summary
•
Acquisition
to
be
financed
through
a
combination
of
new
debt
and
existing
balance
sheet
cash
•
NCR to raise $1.1 billion of newly funded debt to finance the transaction
–
Committed financing provided by J.P. Morgan, RBC Capital Markets, BofA Merrill Lynch
and Morgan Stanley
•
NCR to maintain a strong capital structure post the transaction
–
LTM leverage below 3.5x adjusted debt / EBITDA per S&P methodology
–
Have had preliminary discussions with S&P and plan to maintain an active dialogue
–
Strong free cash flow generation supports deleveraging over time
–
Robust
liquidity
position
with
approximately
$350
-
$400
million
of
remaining
cash
on
the balance sheet and $300 million of availability under a new credit facility at
closing |
 NCR
Confidential 12
Summary: Compelling Rationale for Radiant Acquisition
•
Accelerates NCR’s strategy to move into fast-growth, high margin adjacencies and
aligns with our vision of becoming a hardware-enabled, software-driven
business •
Adds category leadership in Hospitality and Specialty Retail and
immediately establishes a
strong global position in a third core vertical
•
Creates a company with a unique portfolio of point-of-sale and self-service
solutions targeted to meet customer needs across multiple platforms, supported by
best-in-class service organization
•
Enhances NCR’s strategic posture and positions the company for long-term growth,
accelerated margin expansion and earnings appreciation
•
Assembles a strong combined management team with commitment to shareholder value
creation
•
Expected to be accretive to Non-GAAP earnings in 2012 |