SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: APRIL 15, 1998
NCR CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 001-00395 31-0387920
(STATE OR OTHER JURISDICTION OF (COMMISSION (I.R.S. EMPLOYER
INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
1700 S. PATTERSON BLVD., DAYTON, OH 45479
(937)445-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
Item 5. Other Events
The Registrant's news release dated April 15, 1998, with respect to its
financial results for the quarter ended March 31, 1998, including condensed
consolidated balance sheets as of March 31, 1998, and condensed consolidated
statements of operations, consolidated revenue summary, and condensed
consolidated statements of cash flows for the three months ended March 31, 1998,
is attached and incorporated herein by reference.
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.
NCR Corporation
Date: April 21, 1998 By: /s/ John L. Giering
---------------------------
John L. Giering, Senior
Vice President and Chief
Financial Officer
NCR CORPORATION
INVESTOR RELATIONS DEPARTMENT
Tel: 937-445-5905
Fax: 937-445-5541
HTTP://WWW.NCR.COM
News Release
- --------------------------------------------------------------------------------
NCR Reports Improved First Quarter Financial Results
DAYTON, Ohio - For the first time in a first quarter since 1991, NCR
Corporation today reported break-even net income and earnings per share. This
compares with a loss of $16 million, or $.16 per share, in the year-ago period.
Revenue in the quarter was $1.309 billion, a decline of six percent
compared to the $1.389 billion reported in the comparable period last year.
Revenue declined two percent on a local currency basis.
Total orders posted a double-digit decline in the quarter compared to the
same period last year.
"Our overall quarterly results continue to show year-over-year
improvement," said NCR Chairman & CEO Lars Nyberg. "Pressures on operating
results continue to be driven by the
economic situation in Asia and foreign exchange rates. In addition, the
realignment of our business announced in the last quarter of 1997 continued into
this year, but that effort is now largely behind us. We are now well positioned
to successfully meet our growth objectives for orders and revenue in the second
quarter and the remainder of 1998."
ORDERS
------
In the quarter, total orders declined by a double-digit percentage on
both a dollar-reported and local currency basis compared to year-ago levels.
While orders for professional services posted a gain, orders declined in all
other product groups and across all geographic regions. Order backlogs, however,
increased in the quarter as the dollar value of incoming orders exceeded the
revenue resulting from customer deliveries of NCR products and services.
REVENUE
-------
Worldwide revenue declined two percent on a local currency basis and six
percent on a dollar reported basis. Revenue gains of 16 percent and five
percent, respectively, were reported in financial and retail products. These
gains, however, were offset by declines of 19 percent and seven percent,
respectively, in total computer products and Systemedia products. Worldwide
customer support and professional services revenue increased one percent on a
local currency basis but declined three percent on a dollar reported basis. On a
geographic basis, revenue was flat in Europe/Middle East/Africa but declined in
the Americas and Asia/Pacific regions. On a local currency basis, Europe/Middle
East/Africa reported a four percent gain in revenue compared to the first
quarter a year ago.
GROSS MARGIN
------------
Total gross margin for NCR products and services declined 1.8 percentage
points of revenue on a dollar reported basis to 27.0 percent from 28.8 percent
in last year's first quarter. Products and systems gross margin declined 2.4
percentage points of revenue while services gross margin declined one percentage
point of revenue.
PRIOR-YEAR RECLASSIFICATIONS
----------------------------
NCR reclassified certain 1997 amounts to be more consistent with
industry practices. There was no impact on total revenue or operating
profitability resulting from this action. Certain internal information systems
expenditures were reclassified from cost of sales and services to selling,
general and administrative expenses. Also, revenue from and cost of rentals were
reclassified from services to sales.
EXPENSES
--------
Total expenses were $388 million in the quarter compared to $418 million
in the year ago-period, a decline of seven percent. Selling, general and
administrative expenses were seven percent below the 1997 level as a slight
increase in selling expenses was more than offset by declines in other expenses.
Research and development expenses were down eight percent from 1997. Reductions
in R&D continue to be achieved through increased use of standard industry
components. A portion of the R&D savings was re-invested in software development
in support of the company's customer solutions.
OTHER INCOME
------------
In the quarter, NCR recorded $37 million in other income from interest,
gains from foreign currency contracts and fees from licensing intellectual
properties. This offset losses from operations of $34 million and $3 million
in interest expense.
BALANCE SHEET
-------------
NCR ended the quarter in strong financial position. NCR recorded $1.106
billion in cash and short term investments, debt of $106 million and total
shareholders' equity of $1.361 billion.
As of March 31, 1998, NCR employed 37,400 people worldwide, including
contractors, a decline of 900 persons from December 31, 1997.
NCR Corporation (NYSE: NCR) is a recognized world leader in scalable
data warehousing, self-service and store automation solutions for the retail,
financial and communications industries and other select markets. NCR's
solutions are built on the foundation of the company's long-established industry
knowledge and consulting expertise, value adding software, world-leading
hardware technology, global customer support services and a complete line of
consumable and media products. More information on NCR and its products can be
found on the World Wide Web at: http://www.ncr.com.
FINANCIAL INFORMATION
---------------------
Detailed financial information regarding NCR's first quarter results is
available on the Internet: http://www.ncr.com. NCR's senior vice president and
Chief Financial Officer, John Giering, will discuss the company's financial
performance in a taped broadcast. Access is
available beginning at 11:00 A.M. (EST) today continuing until 5:00 P.M. (EST)
on Friday, April 17, 1998. The broadcast can be accessed by calling
(402) 220-5185.
NOTE TO INVESTORS:
This news release contains forward-looking statements, including
statements as to anticipated or expected results, beliefs, opinions, and future
financial performance. These forward-looking statements are based on current
expectations and assumptions and involve risk and uncertainties that could cause
NCR's actual results to differ materially.
In addition to the factors discussed in this release, other risks and
uncertainties include the timely development, production or acquisition, and
market acceptance of new and existing products and services; shifts in market
demands; continued competitive factors and pricing pressures; short
product-cycles and rapidly changing technologies; turnover of sales force and
the ability to attract and retain skilled employees; tax rates; ability to
execute the company's business plan; general economic and business conditions;
and other factors detailed from time to time in the company's Securities and
Exchange Commission reports and the company's annual reports to stockholders.
The company does not undertake any obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
###
NCR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED MARCH 31
---------------------------
1998 1997
---- ----
REVENUES
Sales $ 659 $ 719
Services 650 670
------ ------
TOTAL REVENUES 1,309 1,389
Cost of sales 458 483
Cost of services 497 506
------ ------
GROSS MARGIN 354 400
% of Revenue 27.0% 28.8%
Selling, general, and administrative expenses 308 331
% of Revenue 23.5% 23.8%
Research and development expenses 80 87
% of Revenue 6.1% 6.3%
------ ------
INCOME (LOSS) FROM OPERATIONS (34) (18)
% of Revenue -2.6% -1.3%
Interest expense 3 2
Other (income) expense, net (37) (5)
------ ------
INCOME (LOSS) BEFORE INCOME TAXES - (15)
% of Revenue 0.0% -1.1%
Income tax expense - 1
------ ------
NET INCOME (LOSS) $ - $ (16)
====== ======
% of Revenue 0.0% -1.2%
NET INCOME (LOSS) PER COMMON SHARE,
BASIC AND DILUTED $ - $(0.16)
====== ======
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 103.2 101.5
====== ======
Certain prior year amounts have been reclassified to conform to the 1998
presentation.
NCR CORPORATION
CONSOLIDATED REVENUE SUMMARY
(UNAUDITED)
(IN MILLIONS)
THREE MONTHS ENDED MARCH 31
---------------------------
1998 1997
---- ----
BY PRODUCT LINE
Retail Products $ 84 $ 80
Financial Products 199 171
Scalable Data Warehousing Products 68 86
Other Computer Products 197 243
Systemedia 110 119
Customer Support Services 504 508
Professional Services 118 133
Other Products & Services 29 49
------ ------
TOTAL REVENUES $1,309 $1,389
====== ======
THREE MONTHS ENDED MARCH 31
---------------------------
1998 1997
---- ----
BY INDUSTRY/CUSTOMER SERVED
Retail Industry $ 269 $ 266
Financial Industry 560 553
Communications Industry and
National Accounts 308 362
Systemedia 110 119
Other 62 89
------ ------
TOTAL REVENUES $1,309 $1,389
====== ======
Certain prior year amounts have been reclassified to conform to the 1998
presentation.
NCR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
MARCH 31 DECEMBER 31 MARCH 31
1998 1997 1997
----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
ASSETS
Current assets
Cash and short-term investments $ 1,106 $ 1,129 $ 1,133
Accounts receivable, net 1,355 1,471 1,336
Inventories 545 489 535
Other current assets 212 182 257
----------- ----------- -----------
TOTAL CURRENT ASSETS 3,218 3,271 3,261
Property, plant and equipment, net 1,089 1,106 1,143
Other assets 932 916 763
----------- ----------- -----------
TOTAL ASSETS $ 5,239 $ 5,293 $ 5,167
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 71 $ 59 $ 44
Accounts payable 336 378 314
Other current liabilities 1,484 1,527 1,584
----------- ----------- -----------
TOTAL CURRENT LIABILITIES 1,891 1,964 1,942
Long-term debt 35 35 44
Other long-term liabilities 1,952 1,941 1,860
----------- ----------- -----------
TOTAL LIABILITIES 3,878 3,940 3,846
TOTAL SHAREHOLDERS' EQUITY 1,361 1,353 1,321
----------- ----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 5,239 $ 5,293 $ 5,167
=========== =========== ===========
NCR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN MILLIONS)
THREE MONTHS ENDED MARCH 31
---------------------------
1998 1997
---- ----
OPERATING ACTIVITIES
Net Income (Loss) $ - $ (16)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization 97 92
Changes in operating assets and liabilities
Receivables 116 121
Inventories (56) (96)
Other (133) (103)
------ ------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 24 (2)
INVESTING ACTIVITIES
Short-term investments, net (76) (237)
Expenditures for service parts and property, plant, and equipment (94) (48)
Other investing activities 22 6
------ ------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (148) (279)
FINANCING ACTIVITIES
Short-term borrowings, net 12 16
Long-term debt, net - (4)
Other financing activities 17 -
------ ------
NET CASH PROVIDED BY FINANCING ACTIVITIES 29 12
Effect of exchange rate changes on cash and cash equivalents (4) (38)
------ ------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (99) (307)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 886 1,163
------ ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 787 $ 856
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