Diebold Nixdorf (DBD) 8-K/A Diebold, Incorporated 8-K/A

TABLE OF CONTENTS

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 8-K/A
Amendment No. 1

Current Report

PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): October 21, 1999

Diebold, Incorporated

(Exact name of registrant as specified in its charter)

Ohio	1-4879	34-0183970
(State or other jurisdiction of incorporation or organization)	(Commission file number)	(IRS Employer Identification Number)

5995 Mayfair Road, PO Box 3077, North Canton, Ohio	44720-8077
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (330) 490-4000
—————————————————————————————————————————— ——————————

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS

Effective October 21, 1999, the Registrant purchased all of the outstanding stock of Procomp Amazonia Industria Eletronica, S.A. (“Procomp”), a Brazilian manufacturer of innovative technological solutions including personal computers, servers, software, professional services, and retail and banking automation equipment. The purchase price was $222 million which was paid in a combination of cash and stock. The Registrant issued 1,710,214 Common Shares on October 21, 1999 as part of the acquisition. The purchase price was arrived at after careful analysis of Procomp’s historical performance, current financial status and projected future growth. The cash portion of the purchase price was funded by the use of operating funds, liquidation of investments and drawing on short term lines of credit.

As part of the acquisition, the Registrant acquired property, plant and equipment used in the manufacture and distribution of Procomp’s products. Registrant intends to leave existing operations in place as each product line will be evaluated over the next year for continued feasibility.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

(a)	Financial statements of business acquired.
	The financial statements of Procomp Amazonia Industria Eletronica, S.A. required by this item are contained in the financial statements and footnotes thereto listed in the Index on page 3 herein and are incorporated by reference herein.
(b)	Pro forma financial information.
	The pro forma financial information required by this item is contained in the financial statements and footnotes thereto listed in the Index on page 3 and is incorporated by reference herein.
(c)	Exhibits
10.	Stock purchase agreement between Diebold, Incorporated and Procomp Amazonia Industria Eletronica, S.A.
99.	Press Release

2

INDEX TO FINANCIAL STATEMENTS

	Page No.
PROCOMP AMAZONIA INDUSTRIA ELETRONICA, S.A.
Report Of Independent Auditors		4
Financial Statements
Consolidated Balance Sheets as of December 31, 1998 and 1997 (audited) and September 30, 1999 (unaudited)		5
Consolidated Statements of Income for the Years Ended December 31, 1998 and 1997 (audited) and for the Nine Months Ended September 30, 1999 and 1998 (unaudited)		6
Consolidated Statement of Shareholders’ Equity for the Years Ended December 31, 1998 and 1997 (audited)		7
Consolidated Statement of Financial Position for the Years Ended December 31, 1998 and 1997 (audited)		8
Notes To Financial Statements		9
PRO FORMA DATA FOR DIEBOLD, INC. AND PROCOMP AMAZONIA INDUSTRIA ELETRONICA, S.A.
Unaudited Pro Forma Financial Information		17
Unaudited Pro Forma Condensed Consolidated Balance Sheets as of September 30, 1999		18
Unaudited Pro Forma Condensed Consolidated Statements of Income for the Year Ended December 31, 1998		19
Unaudited Pro Forma Condensed Consolidated Statements of Income for the 9 Months Ended September 30, 1999		20
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements		21
Exhibits		21

3

(Free translation into English from the Financial Statements Previously issued in Portuguese)

INDEPENDENT AUDITORS’ REPORT

To the Shareholders of
Procomp Amazonia Industria Eletronica S.A.
Sao Paulo — SP

1.	We have audited the accompanying consolidated balance sheets of Procomp Amazonia Industria Eletronica S.A. and subsidiaries as of December 31, 1998 and 1997, and the related consolidated statements of income, changes in shareholders’ equity and changes in financial position for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
2.	We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluation the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
3.	In our opinion the consolidated balance sheets referred to in the first paragraph present fairly, in all material respects, the financial position of Procomp Amazonia Industria Eletronica S.A. and subsidiaries as of December 31, 1998 and 1997, and the results of their operations, changes in shareholders’ equity and changes in their financial position for the years then ended in conformity with generally accepted accounting principles established by Brazilian Corporate Law.
4.	This report originally written in Portuguese has been translated into English for the convenience of the readers.

Sao Paulo, March 4, 1999

/s/Deloitte Touche Tohmatsu	/s/Agenor N. Yamamoto
DELOITTE TOUCHE TOHMATSU	Agenor N. Yamamoto
Auditores Independentes	Accountant
CRC 2 SP 011609/0-8	CRC 1 SP 115257/0-7

4

PROCOMP AMAZONIA INDUSTRIA ELETRONICA S.A. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1998 AND 1997 (audited)
AND AS OF SEPTEMBER 30, 1999 (unaudited)
(Amounts in Brazilian reais — R$)

			September 30,		December 31,		December 31,
			1999		1998		1997
			(unaudited)		(audited)		(audited)
			R$		R$		R$
ASSETS
CURRENT ASSETS
	Cash and banks			35,258,692		1,826,078		7,061,977
	Short-term investments			17,055,121		63,612,965		3,662,245
	Trade accounts receivable			62,980,837		53,713,246		54,510,750
	Recoverable taxes			21,802,412		15,427,626		7,626,200
	Other credits			25,289,116		14,315,953		9,963,615
	Inventories			89,245,116		77,817,261		49,097,685
	Prepaid expenses			647,672		412,018		429,677
		Total current assets		252,278,966		227,125,147		132,352,149
LONG-TERM ASSETS
	Intercompany loan			—		206,436		1,616,911
	Collateralized marketable security			3,205,383		6,251,388		7,866,710
	Deferred income tax			8,506,001		5,156,151		5,870,852
	Technical assistance inventories			—		4,306,967		2,554,089
	Other credits			658,429		898,396		1,124,996
		Total long-term assets		12,369,813		16,819,338		19,033,558
PERMANENT ASSETS
	Investments			281,477		1,449,292		523,328
	Property, plant and equipment			28,579,760		17,067,888		17,617,158
	Leased assets			—		5,357,315		9,480,509
	Deferred assets			232,679		303,495		—
		Total permanent assets		29,093,916		24,177,990		27,620,995
				293,742,695		268,122,475		179,006,702
LIABILITIES
CURRENT LIABILITIES
	Suppliers			23,310,334		15,650,959		7,525,569
	Loans and financing			56,094,858		54,634,332		7,704,382
	Taxes and social charges payable			5,542,376		5,443,206		4,653,068
	Accrual for vacation and social charges			7,986,558		4,750,604		3,971,597
	Accrual for income and social contribution tax			1,391,153		955,933		917,329
	Other accruals			17,159,382		2,969,830		2,009,389
	Dividends payable			—		345,740		—
	Accounts payable			1,743,659		3,314,776		1,479,566
	Advances from customers			4,119,402		2,179,379		791,049
		Total current liabilities		117,347,722		90,244,759		29,051,949
LONG-TERM LIABILITIES
	Loans and financing			—		154,769		759,295
	Intercompany loan			—		—		16,181
	Accrual for labor contingencies			—		1,636,275		1,083,337
		Total long-term liabilities		—		1,791,044		1,858,813
Minority interest				2		2		2
SHAREHOLDERS’ EQUITY
	Capital			122,808,724		122,808,724		116,830,177
	Premium on share capital			—		32,000		32,000
	Capital reserve — investment subsidy			40,224,443		13,462,464		12,424,486
	Profit reserve			—		1,773,861		956,791
	Retained Earnings			13,361,804		38,009,621		17,852,484
		Total shareholders’ equity		176,394,971		176,086,670		148,095,938
				293,742,695		268,122,475		179,006,702

See notes to consolidated financial statements.

5

PROCOMP AMAZONIA INDUSTRIA ELETRONICA S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997 (audited)
AND FOR THE NINE-MONTH PERIODS ENDED
SEPTEMBER 30, 1999 AND 1998 (unaudited)
(Amounts in Brazilian reais — R$)

			September 30,			September 30,			December 31,			December 31,
			1999			1998			1998			1997
			(unaudited)			(unaudited)			(audited)			(audited)
			R$			R$			R$			R$
Gross sales and services revenue				485,413,562			334,705,812			462,623,549			315,750,300
Taxes on sales and returns				(87,404,642	)		(27,293,744	)		(39,489,007	)		(37,370,629	)
Net revenue				398,008,920			307,412,068			423,134,542			278,379,671
Cost of goods sold and of services rendered				(359,733,265	)		(249,015,286	)		(340,314,348	)		(204,834,594	)
Gross profit				38,275,655			58,396,782			82,820,194			73,545,077
Operating income/(expense)
	Selling expense			(28,322,513	)		(20,654,104	)		(28,322,407	)		(26,159,629	)
	General and administrative expense			(22,553,937	)		(15,799,033	)		(23,505,213	)		(18,831,524	)
	Financial expense			(48,014,430	)		(5,754,345	)		(9,207,955	)		(3,683,245	)
	Financial income			41,045,621			4,523,366			9,586,278			5,806,887
	Other operating income/(expense), net			325,604			55,616			(69,255	)		253,305
		Total operating expense — net		(57,519,655	)		(37,628,500	)		(51,518,552	)		(42,614,206	)
Operating income				(19,244,000	)		20,768,282			31,301,642			30,930,871
Non-operating expense				(6,072,002	)		(588,115	)		(830,138	)		(1,156,226	)
Income before income tax and social contribution and minority interest				(25,316,002	)		20,180,167			30,471,504			29,774,645
Income tax and social contribution				815,223			(6,219,369	)		(9,275,861	)		(9,072,116	)
Minority interest				—			—			—			(2	)
Net income for the year				(24,500,779	)		13,960,798			21,195,643			20,702,527

See notes to consolidated financial statements

6

PROCOMP AMAZONIA INDUSTRIA ELETRONICA S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEARS
ENDED DECEMBER 31, 1998 AND 1997 (audited)
(Amounts in Brazilian reais — R$)

			Capital reserve
			Subscribed
			and paid		Monetary			Premium on		Investment			Profit		Retained
			capitalquota		correction			share capital		subsidy			reserve legal		earnings
			R$		R$			R$		R$			R$		R$
BALANCE AT DECEMBER 31, 1996				34,962,689		9,221,414					24,718,595					18,189,015
Capital increase -
		Extraord. Gen. Meeting 3/24/97		56,226,037		(9,221,414	)				(26,922,356	)				(20,082,267	)
		Extraord. Gen. Meeting 3/24/97		2,811,274
		Extraord. Gen. Meeting 4/9/97		1,608,177
		Extraord. Gen. Meeting 4/18/97		21,222,000
Premium on share capital									32,000
Investment Subsidy for the year:
		Income taxes									5,978,546
		ICMS (State value-added tax)									7,295,415
		Reversal of income tax on unrealized profits									1,354,286
Net income for the year																20,702,527
Appropriation of net income:
		Transfer to legal reserve												956,791		(956,791	)
BALANCE AT DECEMBER 31, 1997				116,830,177		—			32,000		12,424,486			956,791		17,852,484
Portion of the equity subsidiaries
		Mecaf and PCS valued at adj. cost (see note 4)														1,778,564
Capital increase -
	Extraord. Gen. Meeting 12/4/98			5,978,547							(5,978,547	)
Investment Subsidy for the year:
		Income taxes									3,318,074
		ICMS (State value-added tax)									3,171,885
		Reversal of income tax on unrealized profits									526,566
Net income for the year																21,195,643
Appropriation of net income:
		Transfer to legal reserve												817,070		(817,070	)
Dividends																(2,000,000	)
BALANCE AT DECEMBER 31, 1998				122,808,724		—			32,000		13,462,464			1,773,861		38,009,621

[Additional columns below]

[Continued from above table, first column(s) repeated]

			Total
			R$
BALANCE AT DECEMBER 31, 1996				87,091,713
Capital increase -
		Extraord. Gen. Meeting 3/24/97
		Extraord. Gen. Meeting 3/24/97		2,811,274
		Extraord. Gen. Meeting 4/9/97		1,608,177
		Extraord. Gen. Meeting 4/18/97		21,222,000
Premium on share capital				32,000
Investment Subsidy for the year:
		Income taxes		5,978,546
		ICMS (State value-added tax)		7,295,415
		Reversal of income tax on unrealized profits		1,354,286
Net income for the year				20,702,527
Appropriation of net income:
		Transfer to legal reserve
BALANCE AT DECEMBER 31, 1997				148,095,938
Portion of the equity subsidiaries
		Mecaf and PCS valued at adj. cost (see note 4)		1,778,564
Capital increase -
	Extraord. Gen. Meeting 12/4/98
Investment Subsidy for the year:
		Income taxes		3,318,074
		ICMS (State value-added tax)		3,171,885
		Reversal of income tax on unrealized profits		526,566
Net income for the year				21,195,643
Appropriation of net income:
		Transfer to legal reserve
Dividends				(2,000,000	)
BALANCE AT DECEMBER 31, 1998				176,086,670

See notes to the consolidated financial statements.

7

PROCOMP AMAZONIA INDUSTRIA ELETRONICA S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997 (audited)
(Amounts in Brazilian reais — R$)

			December 31,		December 31,
			1998		1997
			(audited)		(audited)
			R$		R$
SOURCE OF FUNDS
From operation:
	Net income for the year			21,195,643		20,702,527
	Expenses/(income)which do not affect working capital:
		Depreciation and amortization		13,039,054		19,666,722
		Write-off of investments		—		1,120,779
		Retirement of permanent assets		2,742,266		7,159,739
Total from operations				36,976,963		48,649,767
From shareholders’:
	Increase/(decrease) in minority interest			—		(4,061,060	)
	Payment of capital increase			—		25,641,451
	Premium on share capital			—		32,000
Total from shareholders’				—		21,612,391
From third parties:
	Portion of the equity of the subsidiaries Mecaf and PCS valued at cost method (see note 4)			1,778,564		—
	Investment in subsidies			6,489,959		13,273,961
	Reversal of income tax on unrealized profit			526,566		1,354,286
	Decrease in long-term assets			2,214,220		153,947
	Increase in long-term liabilities			—		812,254
Total from third parties				11,009,309		15,594,448
Total source of funds				47,986,272		85,856,606
APPLICATION OF FUNDS
	Acquisition of fixed assets			10,954,249		22,585,232
	Increase in deferred assets			458,102		—
	Acquisition of investments			925,964		804,947
	Dividends			2,000,000		—
	Decrease in long-term liabilities			67,769		—
Total application of funds				14,406,084		23,390,179
INCREASE IN NET WORKING CAPITAL				33,580,188		62,466,427
REPRESENTED BY
	Current assets
		At the end of the year		227,125,147		132,352,149
		At the beginning of the year		132,352,149		70,086,266
	Increase			94,772,998		62,265,883
	Current liabilities
		At the end of the year		90,244,759		29,051,949
		At the beginning of the year		29,051,949		29,252,493
	Increase/(decrease)			61,192,810		(200,544	)
INCREASE IN WORKING CAPITAL				33,580,188		62,466,427

See notes to consolidated financial statements

8

PROCOMP AMAZONIA INDUSTRIA ELETRONICA S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (audited)
(Amounts in Brazilian reais — R$)

1. COMPANY’S OPERATION

The Company and its subsidiaries are engaged in the industry, trade, lease, importation and exportation of electronic equipment and its accessories, parts and materials necessary for manufacturing the equipment; rendering of technical assistance services for installation and maintenance of the equipment; development and commercialization of computer programs; elaboration of integration design and solutions for the computer business. The Company’s operating activities (operating profit), conducted in the area covered by SUDAM (Superintendency for the Development of the Amazon), are income tax-exempt for a period of ten years beginning on January 15, 1993.

2. PRESENTATION OF FINANCIAL STATEMENTS

The consolidated financial statements are presented in accordance with Corporate Law accounting practices.

3. SIGNIFICANT ACCOUNTING POLICIES

3.1.	Short-term investments and collateralized marketable securities
	Are recorded at cost plus interest earned to the balance sheet date.
3.2.	Trade accounts receivable and allowance for doubtful account
	Trade accounts receivable and other credits are recorded and maintained in the balance sheet at the nominal value of the credit instruments. The allowance is recorded at an amount considered sufficient to cover potential losses on uncollectible accounts.
3.3.	Inventories
	Are valued at average cost of acquisition or production, which does not exceed the replacement cost or realization value.
	The inventory of materials shipped, for demonstration purposes, that does not return to the Company within a medium term of six months is charged to income as a provision for losses.
3.4.	Technical assistance inventory
	Parts and components assigned for providing technical assistance services are valued by the average cost of acquisition and amortized at an annual rate of 20% to recognized their obsolescence. During 1997, back up assigned for providing technical assistance services were transferred to fixed assets and are being depreciated at a rate of 20% p.a.
3.5.	Property, plant and equipment
	Operating assets
	Are carried at acquisition or production cost, monetarily adjusted through December 31, 1995. Depreciation is calculated using the straight-line method at the following annual rates: industrial machinery, equipment and devices, furniture and fixtures and installations — 10%; computer equipment — 20% to 50%; right to use software — 20% and back-up material — 20%.

9

PROCOMP AMAZONIA INDUSTRIA ELETRONICA S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (audited)
(Amounts in Brazilian reais — R$)

3.5.	Property, plant and equipment (continued)
	Leased assets
	Assets intended for leasing (bank automation equipment) are recorded at cost of acquisition and/or production, monetarily adjusted through December 31, 1995. Depreciation is calculated in accordance with the respective lease contract term. Income from leasing of such assets is accounted for in accordance with the installment amount of contracts.
3.6.	Investments
	Are carried at acquisition cost, monetarily adjusted through December 31, 1995.
3.7.	Suppliers
	Are recorded and maintained in the balance sheet at the nominal value of the debt instruments.
3.8.	Loans and financing
	Are recorded at original value plus exchange or monetary variation and interest accrued to the balance sheet date.
3.9.	Provision for income tax
	Is calculated on net income, adjusted by additions and deductions in accordance with tax law, at a rate of 15% plus an additional 10% on taxable income which exceeds R$ 240,000 per year. The portion of income tax on tax-exempt activities (SUDAM — Superintendency for the Development of the Amazon) is charged to income for the period and credited to capital reserve (investment subsidy). Until December 31, 1997, in addition to the tax incentive of SUDAM, the Company and its subsidiary (Procomp Industria Eletronica Ltda.) were granted an income tax reduction up to 50% of the portion of tax calculated at the rate of 15%, relating to expenses incurred in research and development of the computer area. The provision for income tax is charged to income for the year, net of this incentive amount. The income and social contribution taxes on temporary differences are deferred.
3.10.	Provision for social contribution
	Is calculated at a rate of 8% on income for the year, adjusted by additions and deductions in accordance with tax law.
3.11.	ICMS incentives (State Value-Added Tax)
	Procomp Amazonia Industria Eletronica S.A. pays 15% of the ICMS (state value-added tax) amount due for goods sold whose products have been previously approved by SUFRAMA/Secretary of Industry and Commerce of the Amazon and from June 1997 to December 1998 there occurred a reduction on the basis of calculation on the ICMS of these goods that resulted in a single taxation of 7%. The Company also has a 50% reduction of the ICMS on sales of products that it does not manufacture (the majority consisting of imported goods). The amount that corresponds to the above tax incentives (ICMS not paid) is debited to income for the year as if it were due and credited to the capital reserve account (investment subsidy).

10

PROCOMP AMAZONIA INDUSTRIA ELETRONICA S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (audited)
(Amounts in Brazilian reais — R$)

3.12.	Provision for vacation and social changes
	Is calculated based on salaries in effect at the balance sheet date according to the vacation period earned but not taken (from the date of admission or prior acquisition period to the balance sheet date), plus special bonus (1/3 of salary) and respective social charges.
3.13.	Related-party transactions
	Transactions (purchase and sale of products and services) between the companies are conducted under normal market conditions and recorded in accounts receivable/payable, respectively. Transactions originating from businesses other than those related to the Company’s normal operations are recorded in specific long-term accounts.
3.14.	Gross sales and services revenues
	Revenues from sale of equipment and software are recorded in income in the month in which the assets are sold. Revenues from leased equipment and technical assistance services are recorded monthly in income, according to the terms of the respective contracts.
3.15.	Cost of services rendered
	• The cost of technical assistance services consists principally of    allocation of labor, average cost of acquisition of material and    amortization/depreciation of components and parts (back-up    material) utilized in the services rendered.
	• The cost for leasing services refers to the appropriation of    depreciation of leased equipment, according to the terms of the    contracts.

4. CONSOLIDATION

In preparing the consolidated financial statements, the following were eliminated: the balances (accounts receivable and payable and intercompany loans) and transactions (income and expenses) arising from business between consolidated companies. The shareholders’ equity and net income have been adjusted by the unearned income relating to the sale of inventories and assets assigned for leasing, net of tax effects.

Subsidiary companies included in the consolidation

	Procomp Industria											Procomp Comercio e
	Eletronica Ltda.						Mecaf Eletronica S.A					Servicos Ltda.
	1998			1997			1998			1997		1998			1997
Shares/quotes held		95,837,001			95,837,001			78,480			—		99,999			—
Ownership (%)		99.99	%		99.99	%		99.99	%		—		99.99	%		—
Capital Stock		95,837,003			95,837,003			10,557,627			—		100,000			—
Net income/(loss) for the year		3,115,341			(4,185,467	)		4,687,773			—		(827,070	)		—
Shareholders’ equity/(deficit)		94,075,718			90,868,884			6,917,534			—		(725,688	)		—

11

PROCOMP AMAZONIA INDUSTRIA ELETRONICA S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (audited)
(Amounts in Brazilian reais — R$)

4. CONSOLIDATION (continued)

In addition to the above mentioned subsidiaries, the net income of Procomp Industria Eletronica Ltda. through June 1997 has also been included in the consolidation. On July 30, 1997, Procomp Eletronica Ltda. was merged into Procomp Industria Eletronica Ltda., based on the balance sheet as of June 30, 1997.

In February 1998, Procomp Industria Eletronica Ltda. acquired 51% of the capital of Mecaf Eletronica S.A (Mecaf) (previously it held 49%) and now it has an interest of 99.99%.

Procomp Comercio e Servicos Ltda. (PCS) started its operations in April 1998.

The financial statements of the subsidiaries Mecaf Eletronica S.A. and Procomp Comercio e Servicos Ltda., recorded under the cost method in the official records, for not being considered relevant, were consolidated into the accompanying financial statements for the year ended December 31, 1998

5. RELATED-PARTY LOANS

	Receivable				Payable
	1998		1997		1998		1997
	R$		R$		R$		R$
Procomp Argentina S.A.		206,436		88,911		—		—
PDV Comercio e Representacoes Ltda.		—		—		—		16,181
Mecaf Eletronica S.A.		—		1,528,000		—		—
Total		206,436		1,616,911		—		16,181

6. COLLATERALIZED MARKETABLE SECURITIES

Refers to investments in bank deposit certificates — CDB, with monthly maturity from January 1999 to December 2000, subject to 20% interest per annum. These investments are linked to the sale of equipment manufactured by the Company. On December 31, 1998, these investments total R$ 10,985,593, of which R$ 4,734,205 (in 1997, R$ 3,524,553) is recorded in short-term investments and R$ 6,251,388 (in 1997, R$ 7,866,710) in long-term assets.

12

PROCOMP AMAZONIA INDUSTRIA ELETRONICA S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (audited)
(Amounts in Brazilian reais — R$)

7. INVENTORIES

		1998			1997
		R$			R$
	Finished products		11,696,580			6,488,498
	Materials held for resale		1,351,904			2,409,169
	Raw materials		46,706,602			28,510,426
	Material held for demonstration purposes		2,890,116			4,069,310
	Material on loan		349,944			1,414,140
	Material in repair		1,202,068			816,234
	Other material held by third parties		3,108,466			561,461
	Technical assistance — consumption material		11,913,600			9,195,489
	Material in transit		1,879,665			535,988
	Allowance for losses from materials on demonstration and on loan		(3,281,684	)		(4,903,030	)
	Total		77,817,261			49,097,685
	Technical assistance inventory		7,998,381			6,117,727
Allowance for obsolescence			(3,691,414	)		(3,563,638	)
	Total		4,306,967			2,554,089

During 1997, a portion of the back-up material assigned for providing technical assistance services, in the amount of R$ 6,586,000, was transferred to fixed assets and is being depreciated at an annual rate of 20%.

8. PROPERTY, PLANT AND EQUIPMENT

		1998							1997
				Accumulated
		Cost		Depreciation			Net		Net
		R$		R$			R$		R$
Industrial machinery, equipment and devices			1,133,195		(730,401	)		402,794		406,835
Furniture and fixtures			3,187,903		(1,461,505	)		1,726,398		1,668,411
Computer equipment			4,548,279		(2,446,379	)		2,101,900		2,244,370
Installations			1,704,382		(793,503	)		910,879		474,152
Rights of use of telephone lines			996,647		—			996,647		984,201
Rights of use of software			7,737,878		(6,003,716	)		1,734,162		2,806,904
Vehicles			536,959		(218,701	)		318,258		298,897
Back-up material			9,610,747		(2,965,332	)		6,645,415		7,742,346
Other fixed assets			7,811,012		(5,579,577	)		2,231,435		991,042
	Subtotal		37,267,002		(20,199,114	)		17,067,888		17,617,158
Leased assets			43,564,582		(38,207,267	)		5,357,315		9,480,509
	Total		80,831,584		(58,406,381	)		22,425,203		27,097,667

13

PROCOMP AMAZONIA INDUSTRIA ELETRONICA S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (audited)
(Amounts in Brazilian reais — R$)

9. LOANS AND FINANCING

	1998		1997
	R$		R$
Short term		54,634,332		7,704,382
Long term		154,769		795,295
Total		54,789,101		8,499,677

Short term financing relates to the importation of assets, used in the Company’s activities, that is subject to exchange variation, plus Libor and variable spreads with maturity in September 1999 and, also, financing obtained from Diebold, Inc. and Verifone Inc., with maturity on a quarterly basis (final maturity in March 2000), that are subject to exchange variation plus interest of 11% per annum, a portion of which is long-term.

10. NET SALES AND SERVICES REVENUES AND COSTS OF GOODS SOLD AND OF SERVICES RENDERED BY ACTIVITY

Net sales and services revenues and costs of goods sold and services rendered are distributed by activity as follows:

		Revenue				Cost
		1998		1997		1998		1997
		R$		R$		R$		R$
Sale of equipment — hardware			288,650,167		164,988,174		240,812,904		107,773,659
Sale of software and related services			42,212,782		24,011,006		34,296,502		28,757,856
Leasing of equipment			12,939,334		17,770,298		6,923,758		15,838,302
Technical assistance services			79,332,259		71,610,193		58,281,184		52,464,777
	Total		423,134,542		278,379,671		340,314,348		204,834,594

11. RECONCILIATION BETWEEN PROVISION AND ACCRUAL FOR INCOME AND SOCIAL CONTRIBUTION TAX

		1998			1997
		R$			R$
Description
Income tax and social contribution — current expense			8,034,594			10,199,778
(-) Income tax on operating profit — activity under tax incentive (shareholders’ equity — capital reserve)			(3,318,074	)		(5,978,546	)
(-) Withholding income tax on financial investments and services paid			(1,662,970	)		(386,054	)
(-) Prepaid income tax and social contribution			(1,888,419	)		(2,917,849	)
(-) Prior year income tax adjustments			(209,198	)		—
	Accrual for income and social contribution tax		955,933			917,329

14

PROCOMP AMAZONIA INDUSTRIA ELETRONICA S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (audited)
(Amounts in Brazilian reais — R$)

11. RECONCILIATION BETWEEN PROVISION AND ACCRUAL FOR INCOME AND SOCIAL CONTRIBUTION TAX (continued)

Deferred income tax

The balances on December 31 for deferred income tax consist as follows:

		1998			1997
		R$			R$
Taxable temporary differences			13,947,373			14,366,464
Depreciation differences — agreement rates versus tax rates			1,305,760			2,494,776
Unearned income on intercompany sales			1,666,615			3,503,382
	Total		16,919,748			20,364,622
Income tax — assets			4,229,940			5,091,156
Income tax — capital reserve			(322,908	)		(849,474	)
Social contribution			1,249,119			1,629,170
	Total		5,156,151			5,870,852

12. CAPITAL SHARE

The subscribed and paid-in capital is represented by 115,590,267 common, nominative shares without nominal value, distributed as follows:

		Shares		Ownership %
Eric Jan Roorda			35,059,516		30.3	%
Erich Muschellack			30,575,495		26.4	%
Roberto Rauh			24,236,673		21.0	%
ML America Investments Ltd.			19,982,090		17.3	%
Fernando Antonio Leme			5,736,491		5.0	%
Paulo Ferreira Aratangy			1		—
Paulo Cesar Carmona Felizardo			1		—
	Total		115,590,267		100.0	%

13. CONTINGENCIES

The Company and its subsidiaries are challenging in court the claims filed by ex-employees which, as of December 31, 1998, amounted to R$ 4,754,500. Based on its legal counsel’s estimate of the amount of potential losses, the company recorded an accrual for labor contingencies which, as of December 31, 1998, amounted to R$ 1,636,275 (in 1997, R$ 1,083,337).

15

PROCOMP AMAZONIA INDUSTRIA ELETRONICA S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (audited)
(Amounts in Brazilian reais — R$)

14. YEAR 2000

The Company and its subsidiaries are developing a program for adapting its computer systems to the year 2000. In this regard, the Company and its subsidiaries are investing in projects of systems and software to ensure the proper functioning of the systems. Management does not expect the occurrence of material effects on the recording of their transactions after December 31, 1999.

15. SUBSEQUENT EVENT

In mid January 1999, the Central Bank of Brazil changed the Brazilian exchange policy and extinguished the so-called exchange band by which it managed the floating margin of the Brazilian real in relation to the dollar of the United States, thus, allowing the market to be free to negotiate the exchange rate without the Central Bank’s interference. As a result the Brazilian real devalued by 40% through February 25, 1999 relative to the dollar of the United States when compared to the rate prevailing on December 31, 1998. To date, it is not possible to determine to what extent the new exchange rate will impact the Company’s operations.

16

DIEBOLD, INCORPORATED AND SUBSIDIARIES

UNAUDITED PRO FORMA FINANCIAL DATA

The following Unaudited Pro Forma Condensed Consolidated Balance Sheets as of September 30, 1999 were prepared assuming the acquisition of Procomp had been consummated on September 30, 1999. The Unaudited Pro Forma Condensed Consolidated Statements of Income for the Year Ended December 31, 1998 and for the Nine Months ended September 30, 1999 were prepared assuming the acquisition of Procomp had occurred on January 1, 1998 and January 1, 1999, respectively. The acquisition of Procomp has been accounted for as a purchase business combination and, accordingly, the purchase price has been allocated to identifiable tangible and intangible assets acquired and liabilities assumed, based upon their respective fair values, with the excess allocated to goodwill to be amortized over the estimated economic lives from the respective dates of acquisition. The pro forma financial information does not purport to represent what the Registrant’s consolidated results of operations would have been if the acquisition had in fact occurred on these dates, nor does it purport to indicate the future consolidated financial position or future consolidated results of operations of the Registrant. The pro forma adjustments are based on currently available information, certain assumptions that management believes are reasonable, the translation from Brazilian reais to United States dollars, and the translation from Brazilian GAAP to US GAAP.

17

DIEBOLD, INCORPORATED AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1999
(In U.S. Dollars in thousands)

			(1)			(2)		(3)			(4)
			Diebold Inc.			Procomp		Adjustments			Consolidated
ASSETS
Current Assets
	Cash and cash equivalents		$	16,805		$	18,194	$	(2,357	)	$	32,642
	Short-term investments			43,438			8,800		—			52,238
	Trade and notes receivable			319,821			32,498		(15,428	)		336,891
	Inventories			127,818			45,870		—			173,688
Prepaid expenses and other current assets				72,817			28,079		—			100,896
		Total current assets		580,699			133,441		(17,785	)		696,355
Securities and other investments				215,337			1,799		—			217,136
Property, plant and equipment, at cost				292,380			12,896		—			305,276
Less accumulated depreciation and amortization				147,631			—		—			147,631
				144,749			12,896		—			157,645
Finance receivables				71,342			558		—			71,900
Other assets				87,329			4,099		130,068			221,496
			$	1,099,456		$	152,793	$	112,283		$	1,364,532
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
	Accounts payable and other current liabilities		$	190,783		$	31,605	$	(15,428	)	$	206,960
	Current notes payable			—			28,945		178,000			206,945
	Deferred income			76,125			—		—			76,125
		Total current liabilities		266,908			60,550		162,572			490,030
Bonds payable				20,800			—		—			20,800
Pensions				25,245			—		—			25,245
Postretirement benefits				22,395			—		—			22,395
Minority interests				3,928			1		—			3,929
Shareholders’ equity
	Common shares			87,012			—		2,138			89,150
	Additional capital			45,795			63,369		(23,554	)		85,610
	Retained earnings			666,538			28,873		(28,873	)		666,538
	Treasury shares			(23,067	)		—		—			(23,067	)
	Accumulated other comprehensive income			(15,257	)		—		—			(15,257	)
	Other			(841	)		—		—			(841	)
		Total shareholders’ equity		760,180			92,242		(50,289	)		802,133
			$	1,099,456		$	152,793	$	112,283		$	1,364,532

1)	Reflects the Unaudited Condensed Consolidated Balance Sheets of Diebold, Inc. and Subsidiaries as of September 30, 1999, previously presented on Form 10-Q.
2)	Reflects the Unaudited Condensed Consolidated Balance Sheets of Procomp as of September 30, 1999, in accordance with U.S. generally accepted accounting principles. Certain amounts have been reclassified to conform to the Registrant’s presentation.
3)	Reflects adjustments made to present Pro Forma Condensed Consolidated Balance Sheets. Please refer to notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
4)	Reflects the Condensed Consolidated Balance Sheets of the Registrant, on a pro forma basis assuming the acquisition of Procomp.

See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

18

DIEBOLD, INCORPORATED AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1998
(In U.S. dollars in thousands except per share amounts)

		(1)			(2)			(3)			(4)
Net sales		Diebold, Inc.			Procomp			Adjustments			Consolidated
	Products	$	750,161		$	241,676		$	(21,380	)	$	970,457
	Services		435,546			112,974			—			548,520
			1,185,707			354,650			(21,380	)		1,518,977
Cost of sales
	Products		462,788			204,898			(17,916	)		649,770
	Special charges		9,864			—			—			9,864
	Services		306,805			81,018			—			387,823
			779,457			285,916			(17,916	)		1,047,457
Gross profit			406,250			68,734			(3,464	)		471,520
Selling and administrative expense			194,535			37,038			—			231,573
Research, development and engineering expense			54,215			7,652			—			61,867
Realignment charges			51,253			—			—			51,253
			300,003			44,690			—			344,693
Operating profit			106,247			24,044			(3,464	)		126,827
Investment income			18,587			—			—			18,587
Miscellaneous, net			(3,184	)		4,432			(18,649	)		(17,401	)
Minority interest			(1,843	)		—			—			(1,843	)
Income/(loss) before taxes			119,807			28,476			(22,113	)		126,170
(Taxes)/benefit on income			(43,659	)		(4,502	)		2,235			(45,926	)
Net income		$	76,148		$	23,974		$	(19,878	)	$	80,244
Basic weighted — average shares outstanding			68,960									70,524
Diluted weighted — average shares outstanding			69,310									70,874
Basic earnings per share		$	1.10								$	1.14
Diluted earnings per share		$	1.10								$	1.13

1)	Reflects the Unaudited Condensed Consolidated Statements of Income of Diebold, Inc. and Subsidiaries for the Year Ended December 31, 1998, previously presented on Form 10-K.
2)	Reflects the Unaudited Condensed Consolidated Statements of Income of Procomp for the year ended December 31, 1998, in accordance with U.S. generally accepted accounting principles. Certain amounts have been reclassified to conform to the Registrant’s presentation.
3)	Reflects adjustments made to present Pro Forma Condensed Consolidated Statements of Income. Please refer to notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
4)	Reflects the Unaudited Condensed Consolidated Statements of Income of the Registrant, on a pro forma basis assuming the acquisition of Procomp.

See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

19

DIEBOLD, INCORPORATED AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(In U.S. dollars in thousands except per share amounts)

	(5)			(6)			(7)			(8)
Net sales	Diebold, Inc.			Procomp			Adjustments			Consolidated
Products	$	534,495		$	164,586		$	(18,104	)	$	680,977
Services		358,762			57,509			—			416,271
Cost of sales		893,257			222,095			(18,104	)		1,097,248
Products		312,003			145,752			(16,892	)		440,863
Services		255,343			42,302			—			297,645
		567,346			188,054			(16,892	)		738,508
Gross profit		325,911			34,041			(1,212	)		358,740
Selling and administrative expense		153,653			26,119			—			179,772
Research, development and engineering expense		35,532			2,678			—			38,210
		189,185			28,797			—			217,982
Operating profit		136,726			5,244			(1,212	)		140,758
Investment income		15,579			—			—			15,579
Miscellaneous, net		(5,789	)		(6,573	)		(13,553	)		(25,915	)
Minority interest		(674	)		—			—			(674	)
Income /(loss) before taxes		145,842			(1,329	)		(14,765	)		129,748
(Taxes)/benefit on income		(52,503	)		904			4,890			(46,709	)
Net income/(loss)	$	93,339		$	(425	)	$	(9,875	)	$	83,039
Basic weighted — average shares outstanding		68,943									70,654
Diluted weighted — average shares outstanding		69,160									70,870
Basic earnings per share	$	1.35								$	1.18
Diluted earnings per share	$	1.35								$	1.17

5)	Reflects the Unaudited Condensed Consolidated Statements of Income of Diebold, Inc. and Subsidiaries for the Nine Months Ended September 30, 1999, previously presented on Form 10-Q.
6)	Reflects the Unaudited Condensed Consolidated Statements of Income of Procomp for the Nine Months Ended September 30, 1999, in accordance with U.S. generally accepted accounting principles. Certain amounts have been reclassified to conform to the Registrant’s presentation. Results in 1999 were severely impacted by the devaluation of the Brazilian reais beginning in January 1999.
7)	Reflects adjustments made to present Pro Forma Condensed Consolidated Statements of Income. Please refer to notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
8)	Reflects the Unaudited Condensed Consolidated Statements of Income of the Registrant, on a pro forma basis assuming the acquisition of Procomp. Results in 1999 were severely impacted by the devaluation of the Brazilian reais beginning in January 1999.

See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

20

DIEBOLD, INCORPORATED AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars in thousands except per share amounts)

NOTE 1 — BASIS OF PRESENTATION

The Unaudited Pro Forma Condensed Consolidated Financial Statements do not give effect to any potential cost savings and synergies that could result from the acquisitions included therein. Management believes that the assumptions used provide a reasonable basis for presenting all of the significant effects of the acquisitions included therein, that the pro forma adjustments give appropriate effect to those assumptions, and that the pro forma adjustments are properly applied in the Unaudited Pro Forma Condensed Consolidated Financial Statements.

NOTE 2 — PRO FORMA ADJUSTMENTS

Balance sheet adjustments were made to record the acquisition, eliminate inter-company receivables and payables and to eliminate subsidiary equity. The acquisition was effected through the payment of $2,357 in cash, drawing on short term lines of credit for $178,000 and issuing 1,710,214 Common Shares with a fair market value of $41,953.

Income statement adjustments were made to eliminate inter-company sales, to record amortization of the goodwill from the purchase, to record interest expense for the short term debt used to finance the acquisition, and to adjust income tax expense to the proper effective tax rate.

NOTE 3 — BASIC AND DILUTED EARNINGS PER SHARE

The basic and diluted earnings per share computations are based on the weighted-average number of shares outstanding during each period

DIEBOLD, INCORPORATED AND SUBSIDIARIES
EXHIBITS

Exhibit No.
10.	Stock Purchase Agreement between Diebold, Incorporated and Procomp Amazonia Industria Eletronica S.A.— incorporated by reference to Exhibit 10 to Registrant’s Form 8-K dated October 21, 1999.
99.	Press Release — incorporated by reference to Exhibit 99 to the Registrant’s Form 8-K dated October 21, 1999.

21

DIEBOLD INCORPORATED AND SUBSIDIARIES
FORM 8-K/A

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:	January 3, 2000	By: /s/ Robert L. Stockamp
		Robert L. Stockamp
		Vice President and Controller
		(Interim Principal Accounting and
		Financial Officer)

22

DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 8-K/A

INDEX TO EXHIBITS

Exhibit No.		Page No.
10.	Stock Purchase Agreement between Diebold, Incorporated and Procomp Amazonia Industria Eletronica S.A.— incorporated by reference to Exhibit 10 to Registrant’s Form 8-K dated October 21, 1999.	—
99.	Press Release — incorporated by reference to Exhibit 99 to the Registrant’s Form 8-K dated October 21, 1999.	—

23