Exhibit 99.1
[DIEBOLD LOGO] NEWSRELEASE
Media contact: Investor contact:
Mike Jacobsen John Kristoff
+1 330 490 3796 +1 330 490 5900
jacobsm1@diebold.com kristoj@diebold.com
FOR IMMEDIATE RELEASE:
January 26, 2005
DIEBOLD REPORTS FOURTH QUARTER FINANCIAL RESULTS
Company reports record revenue, earnings and free cash flow*
NORTH CANTON, Ohio - Diebold, Incorporated (NYSE: DBD) today reported record
fourth quarter 2004 net revenue of $717.2 million, up 10.6 percent from the
fourth quarter of 2003. Diluted earnings per share were $.87, an increase of 7.4
percent and within the previous guidance of $.87 to $.92. Net cash provided by
operating activities was $160.7 million, up 127.9 percent from the prior year,
while free cash flow* improved $142.3 million or 139.6 percent. For the full
year 2004, the company reported net revenue of $2,380.9 million, up 12.9 percent
from 2003, diluted earnings per share of $2.54, an increase of 5.8 percent from
2003. Full-year net cash provided by operating activities was $232.6 million, up
14.3 percent from the prior year, while free cash flow* was $171.4 million, up
31.2 percent from 2003.
Diluted earnings per share in the fourth quarter grew 7.4 percent driven by
strong performance in the financial self service and security businesses.
Earnings were adversely affected by the election systems business which was
dilutive by $.03 per share in the fourth quarter of 2004, including charges of
approximately $.02 per share associated with previously disclosed election
systems product recertification, legal and other costs related to concluding the
civil action in the state of California. Election systems business was $.03 per
share accretive in the fourth quarter of 2003.
FOURTH QUARTER HIGHLIGHTS
- -------------------------
- Total product orders, excluding election systems, grew in the
double-digit range.
- Security solutions revenue grew 23.8 percent, and 23.3 percent on a
fixed exchange-rate basis*.
- Asia Pacific total revenue increased 29.8 percent, and 28.2 on a fixed
exchange-rate basis*, while total revenue in the Americas, excluding
election systems, grew 15.4 percent, and 14.5 percent on a fixed
exchange-rate basis*.
- Diluted earnings per share would have increased by 15.4 percent,
excluding the election systems business*.
- Free cash flow* improved $82.9 million; while accounts receivable days
sales outstanding improved 20 days, moving from 83 days at September
30, 2004 to 63 days at December 31, 2004.
*See accompanying notes for non-GAAP measures.
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PAGE 2/ DIEBOLD ANNOUNCES FOURTH QUARTER RESULTS
FULL YEAR HIGHLIGHTS
- --------------------
- Total product orders grew well into the double-digit range.
- Total financial self-service revenue grew 13.1 percent and 10.1
percent on a fixed exchange-rate basis*.
- Security solutions revenue grew 16.8 percent and 16.5 percent on a
fixed exchange-rate basis*.
- Diluted earnings per share increased by 5.8 percent, and grew 12.8
percent excluding the impact of the election systems business*.
- Free cash flow* improved $40.7 million, or 31.2 percent, moving from
$130.7 million in 2003 to $171.4 million in 2004.
- The company repurchased 1,534,181 shares of Diebold stock.
Diebold managed to maintain operating margin in the financial self-service
business by controlling operating expenses and improving manufacturing
efficiencies to offset price erosion in the market, especially in Western
Europe. Security solution margins declined slightly primarily because of
increased fuel and steel costs. Election systems generated operating losses in
2004 as a result of lower revenue as well as product recertification, legal and
other costs related to concluding the civil action in the state of California.
% CHANGE % CHANGE
2004 2003 GAAP FIXED RATE*
-------------- ------------- ------------ ------------
FINANCIAL SELF SERVICE
- -------------------------
REVENUE 1,697,202 1,501,014 13.1% 10.1%
OPERATING PROFIT 244,762 215,796
OPERATING MARGIN 14.4% 14.4%
SECURITY SOLUTIONS
- -------------------------
REVENUE 593,676 508,477 16.8% 16.5%
OPERATING PROFIT 39,925 35,442
OPERATING MARGIN 6.7% 7.0%
ELECTION SYSTEMS
- -------------------------
REVENUE 90,032 100,182 -10.1% -10.1%
OPERATING PROFIT (LOSS) (7,713) 6,119
OPERATING MARGIN -8.6% 6.1%
TOTAL
- -------------------------
REVENUE 2,380,910 2,109,673 12.9% 10.7%
OPERATING PROFIT 276,974 257,357
OPERATING MARGIN 11.6% 12.2%
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PAGE 3/ DIEBOLD ANNOUNCES FOURTH QUARTER RESULTS
FINANCIAL RESULTS
- -----------------
"We remain encouraged by our continued strong order growth in financial
self-service and security, which again increased in the double digits during the
quarter," said Walden W. O'Dell, Diebold chairman and chief executive officer.
"We also achieved strong earnings per share growth, excluding election systems,
growing more than 15 percent off a very strong fourth quarter in 2003*.
"While we are pleased with the performance in U.S. product and service margins
excluding election systems, we are disappointed with margins in Western Europe,
where Opteva has not fully completed customer certifications. We have made
significant strides in achieving certification for Opteva in Western Europe and
anticipate key certifications will be achieved by the end of the first quarter.
We continue, however, to experience significant pricing pressures. To address
this, we will be taking aggressive actions in 2005 to better align our global
resources and cost structure, enabling us to become much more competitive in
this region. As a result, we anticipate restructuring charges in the range of
$.08 to $.11 per share in 2005 related to realignment of production capacity as
well as streamlining of operations and infrastructure in Western Europe.
"As previously disclosed, election systems issues related to concluding the
settlement in California had a negative impact on earnings and margins during
the fourth quarter," O'Dell continued. "I am extremely pleased with how our
products performed during the U.S. presidential election in November, and remain
confident we have the right solutions to meet the U.S. Congress' deadline for
replacing all punch card and lever machines by 2006."
FIXED EXCHANGE-RATE FOURTH QUARTER ORDERS
- -----------------------------------------
Total orders for products and services increased in the double-digit range
excluding election systems. Financial self-service orders increased in the low
double-digit range, led by strong double-digit growth in Asia-Pacific and the
Americas. These financial self-service order gains were slightly offset by weak
order levels in EMEA, where the market remains competitive and Opteva is not
fully certified by all customers. Security orders remain strong, increasing in
the double-digit range. Orders in election systems declined significantly.
SIGNIFICANT ORDERS FOR THE QUARTER INCLUDED:
- Total Opteva orders of approximately $100 million
- Financial self-service orders from four major financial institutions
in China totaling $36.7 million
- Financial self-service orders from three banks in Latin America
totaling $15.1 million
- Several orders for Opteva, ATM upgrades and physical security
equipment from three financial institutions in North America for $9.9
million
- Orders totaling $8.6 million for Opteva and other self-service
equipment from three financial institutions in Western Europe
- Three Opteva orders in Latin America totaling $4.6 million
- A major order for Opteva in Southeast Asia totaling $4.3 million
- An order for Opteva in Eastern Europe for $3.3 million
*See accompanying notes for non-GAAP measures.
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PAGE 4/ DIEBOLD ANNOUNCES FOURTH QUARTER RESULTS
REVENUE
- -------
Total revenue for the quarter was $717.2 million, up $68.8 million, or 10.6
percent and 8.6 percent on a fixed exchange-rate basis*. Total financial
self-service revenue increased 12.6 percent and 10.0 percent on a fixed
exchange-rate basis*. Security solutions revenue grew 23.8 percent and 23.3
percent on a fixed exchange-rate basis*. Total financial self-service and
security revenue increased by 15.2 percent and 13.0 percent on a fixed
exchange-rate basis*.
REVENUE SUMMARY BY PRODUCT AND SERVICE SOLUTIONS
(IN THOUSANDS -- QUARTER ENDED DEC 31, 2004)
% CHANGE % CHANGE
2004 2003 GAAP FIXED RATE*
---- ---- ----------- -------------
FINANCIAL SELF-SERVICE
- ----------------------
PRODUCTS $281,324 $245,619 14.5% 11.9%
SERVICES 247,436 223,977 10.5% 7.8%
-------- -------- ---- ----
TOTAL FIN. SELF-SERVICE 528,760 469,596 12.6% 10.0%
SECURITY SOLUTIONS
- ------------------
PRODUCTS 92,851 74,418 24.8% 24.0%
SERVICES 82,010 66,811 22.7% 22.5%
-------- -------- ---- ----
TOTAL SECURITY 174,861 141,229 23.8% 23.3%
-------- -------- ---- ----
TOTAL FIN. SELF-SERVICE & SECURITY 703,621 610,825 15.2% 13.0%
ELECTION SYSTEMS 13,598 37,585 -63.8% -63.8%
-------- -------- ---- ----
TOTAL REVENUE $717,219 $648,410 10.6% 8.6%
======== ======== ==== ===
REVENUE SUMMARY BY GEOGRAPHIC AREA
(IN THOUSANDS -- QUARTER ENDED DEC. 31, 2004)
% CHANGE % CHANGE
2004 2003 GAAP FIXED RATE*
---- ---- ----------- -------------
THE AMERICAS
- ------------
FINANCIAL SELF-SERVICE SOLUTIONS $ 346,306 $ 310,458 11.5% 10.3%
SECURITY SOLUTIONS 167,914 135,141 24.3% 24.0%
--------- --------- ---- ----
SUBTOTAL 514,220 445,599 15.4% 14.5%
ELECTION SYSTEMS 13,598 37,585 -63.8% -63.8%
--------- --------- ---- ----
TOTAL AMERICAS 527,818 483,184 9.2% 8.4%
ASIA-PACIFIC
- ------------
FINANCIAL SELF-SERVICE SOLUTIONS 79,118 60,215 31.4% 30.3%
SECURITY SOLUTIONS 6,947 6,070 14.4% 8.1%
--------- --------- ---- ----
TOTAL ASIA PACIFIC 86,065 66,285 29.8% 28.2%
EUROPE, MIDDLE EAST, AFRICA
- ---------------------------
FINANCIAL SELF-SERVICE SOLUTIONS 103,336 98,923 4.5% -2.8%
SECURITY SOLUTIONS - 18 N/A N/A
--------- --------- ---- ----
TOTAL EUROPE, MIDDLE EAST, AFRICA 103,336 98,941 4.4% -2.8%
--------- --------- ---- ----
TOTAL REVENUE $ 717,219 $ 648,410 10.6% 8.6%
========= ========= ==== ===
*See accompanying notes for non-GAAP measures.
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PAGE 5/ DIEBOLD ANNOUNCES FOURTH QUARTER RESULTS
CURRENCY IMPACT
- ---------------
During the quarter, revenue was positively impacted by the year-over-year
strengthening of the euro and certain other currencies. The positive currency
impact in the fourth quarter was approximately $11.9 million or 1.8 percent
versus the prior year reported results.
GROSS MARGIN
- ------------
Total gross margin for the fourth quarter was 28.0 percent, a decrease of 1.7
percentage points from 29.7 percent in the fourth quarter 2003.
Product gross margin was 29.8 percent, a decrease of 2.1 percentage points from
31.9 percent in the fourth quarter 2003. While margins in the United States,
excluding election systems, remained flat, international margins declined as
significant margin weakness in Europe continued. Additionally, the election
systems business adversely affected product margins by 0.3 percentage points as
a result of lower revenue on fixed costs. Excluding the unfavorable impact from
Europe and election systems, product margins would have increased slightly.
Service gross margin was 26.0 percent, a decrease of 1.0 percent from 27.0
percent in the fourth quarter of 2003. This decline was a result of continued
pricing pressures and increased fuel costs. In the United States, where margins
remained flat, the company was able to offset the increase in fuel costs with
the efficiencies gained from field automation initiatives.
OPERATING EXPENSES
- ------------------
Total operating expenses for the quarter as a percent of revenue improved
dramatically, moving from 16.0 percent in the fourth quarter 2003 to 15.2
percent in the fourth quarter 2004. Reduced R&D expenses account for 0.4
percentage points, resulting from ongoing product rationalization created by the
Opteva rollout. The improved leveraging of selling, general and administrative
expenses was achieved due to aggressive cost controls on personnel costs,
despite the adverse impact of approximately $2 million in additional legal and
other expenses related to concluding the civil action in the state of
California. The aggressive controls on personnel costs included strictly
limiting the rate of replacement and new hires, limiting base compensation
increases and implementing a corporate-wide efficiency program.
OPERATING PROFIT
- ----------------
Operating profit was 12.8 percent of revenue, down 0.9 percent from 13.7 percent
in the fourth quarter of 2003. The decrease in operating profit margin was due
to lower gross margins, partially offset by improved operating efficiencies.
OTHER EXPENSE AND MINORITY INTEREST
- -----------------------------------
Other expense and minority interest decreased by $0.5 million, moving from $1.5
million in expense in the fourth quarter of 2003 to $1.0 million in expense in
the fourth quarter of 2004. This decrease in expense was primarily attributable
to increased foreign exchange gains, partially offset by higher minority
interest and other expenses.
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PAGE 6/ DIEBOLD ANNOUNCES FOURTH QUARTER RESULTS
NET INCOME
- ----------
Net income was 8.8 percent of revenue compared to 9.1 percent in the fourth
quarter 2003. The decline in net income as a percent of revenue was mainly the
result of lower operating profits in the election systems business and partially
offset by lower other expense and minority interest and a lower effective tax
rate. The effective tax rate in the fourth quarter was adjusted to reflect the
final annual effective tax rate of 31.6 percent in 2004.
BALANCE SHEET AND CASH FLOW HIGHLIGHTS
- --------------------------------------
The company's net debt* was $87.3 million at December 31, 2004, compared to net
debt* of $27.6 million at December 31, 2003. The $59.7 million increase in net
debt* over the last 12 months was due to the positive impact of $171.4 million
in free cash flow*, more than offset by $71.9 million spent to repurchase
company stock, $62.2 million invested in acquisitions, $53.2 million in dividend
payments, $26.4 million invested in other assets and $17.4 million in foreign
exchange impact.
In the fourth quarter, free cash flow* improved by $82.9 million, moving from
$59.4 million in the fourth quarter of 2003 to $142.3 million in the fourth
quarter of 2004. A substantial portion of this improvement was a result of
improved trade receivable collections. DSO was 63 days at December 31, 2004, a
20-day sequential improvement from 83 days at September 30, 2004. Inventory
turns improved slightly from 4.9 at September 30, 2004 to 5.3 turns at December
31, 2004.
STOCK OPTION AND RESTRICTED STOCK EXPENSE
- -----------------------------------------
As permitted under SFAS No. 123, "Accounting for Stock-Based Compensation," the
company provides quarterly and annual disclosures of the impact to earnings per
share if stock options were expensed. The company estimates that if stock
options were expensed in accordance with SFAS 123, the full year impact in 2004
and 2003 would be approximately $.06 per share. The company estimates that if
stock options were expensed in accordance with SFAS No. 123 for the full year
2005, the impact would be approximately $.07 per share.
On December 15, 2004, the Financial Accounting Standards Board (FASB) issued
Statement 123R, "Share-Based Payment," which now requires companies to measure
compensation costs for all share-based payments (including employee stock
options) at fair value. This statement is effective for non-small business
issuers for quarters beginning after June 15, 2005. The company intends to adopt
this standard in the third quarter of 2005. Full-year 2005 guidance does not
reflect the expensing of stock options.
Also as previously disclosed, in the interest of more directly linking associate
rewards to corporate performance, in 2004 the company granted restricted stock
units in lieu of stock options to a select group of key associates. The impact
from this transition to grants of restricted stock units adversely impacted 2004
earnings by approximately $.01 per share.
*See accompanying notes for non-GAAP measures.
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PAGE 7/DIEBOLD ANNOUNCES FOURTH QUARTER RESULTS
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, or the effect of expensing stock options under
the new accounting standard, SFAS Statement No. 123R "Share-Based Payment".
FIRST QUARTER 2005 OUTLOOK
- --------------------------
Expectations for the first quarter 2005 include:
- First quarter revenue is expected to increase 9 to 11 percent on a
fixed exchange-rate basis*.
- Financial self-service revenue growth of 8 to 10 percent, fixed
exchange-rate*.
- Security revenue growth of 20 to 24 percent, fixed
exchange-rate*.
- Election systems revenue is expected to be $4 to $6 million in
the first quarter.
- The company anticipates restructuring charges of approximately $.07
per share related to the realignment of its operations in Western
Europe.
- Currency exchange is anticipated to be approximately 1.5 percent
favorable versus prior year.
- Depreciation and amortization to be in the range of $19 to 20 million.
- An effective tax rate of approximately 31.5 percent.
- An increase in pension expense of approximately $.01 per share in the
first quarter of 2005 as compared to the first quarter of 2004.
- EPS in the range of $.35 to $.40 per share, including the anticipated
restructuring charge. This compares to $.40 in the first quarter of
2004. EPS excluding the $.07 charge would be in the range of $.42 to
$.47 per share. This represents growth of 5 to 18 percent.
FULL-YEAR 2005 OUTLOOK
- ----------------------
Looking forward to 2005, the following expectations do not include the potential
impact of any future mergers, acquisitions, disposals or other business
combinations. In addition, as previously disclosed, prior guidance did not
include the European restructuring charges and a more conservative election
systems outlook. Including these new factors, management has the following
expectations:
- Revenue growth of 10 to 12 percent, on a fixed exchange-rate basis*.
- Financial self-service revenue growth of 7 to 10 percent, fixed
exchange-rate*.
- Security revenue growth of 17 to 20 percent, fixed
exchange-rate*.
- Election systems revenue is anticipated to be in the range of $70
to $80 million. This includes Ohio's decision to adopt mostly
optical scan rather than all touchscreen technology.
- Favorable currency impact of approximately 1.0 percent versus prior
year.
- Depreciation and amortization of in the range of $75 to 80 million.
- An effective tax rate of approximately 31.5 percent.
- Pension expense is expected to be $0.03 per share higher in 2005,
moving from $0.05 per share in 2004 to $0.08 per share in 2005.
- Research and development will be in the range of 2.5 to 3.0 percent of
revenue.
- EPS in the range of $2.85 to $3.00, including the anticipated
full-year impact of restructuring charges in Europe in the range of
$.08 to $.11 and a $.03 to $.05 impact resulting from a more
conservative view of the election systems business, as a result of
Ohio's decision to move forward with optical scan rather than
touchscreen voting machines. Excluding the impact of restructuring
charges in Europe, this represents EPS growth of 17 to 21 percent.
- Free cash flow* is expected to be in the range of $200 to $230
million.
*See accompanying notes for non-GAAP measures.
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PAGE 8/DIEBOLD ANNOUNCES FOURTH QUARTER RESULTS
NOTES FOR NON-GAAP MEASURES
1. Diluted earnings per share (EPS) excluding election systems business:
YEAR YEAR
Q4 Q4 % ENDED ENDED %
2004 2003 INCREASE 2004 2003 INCREASE
---- ---- -------- -------- ------- ---------
Diluted EPS (GAAP measure) $0.87 $0.81 7.4% $2.54 $2.40 5.8%
Dilution/(Accretion) to diluted EPS from
election systems business 0.03 (0.03) N/A 0.10 (0.06) N/A
Diluted EPS excluding election systems
business (non-GAAP measure) $0.90 $ 0.78 15.4% $2.64 $2.34 12.8%
====== ====== ===== ===== ===== =====
The company believes that this non-GAAP measure provides meaningful
performance data for the remaining business, which represents 98.1
percent of fourth quarter 2004 total revenue and 96.2 percent of
full-year 2004 revenue.
2. Fixed exchange-rate is used to depict order and GAAP revenue growth in
local currency without the benefit or detriment occurring from currency
fluctuations.
3. Free cash flow is calculated as follows:
YEAR YEAR
Q4 2004 Q4 2003 ENDED 2004 ENDED 2003
------- ------- ---------- ----------
Net cash provided by operating activities (GAAP
measure) $ 160,690 $ 70,504 $ 232,648 $ 203,511
Capital expenditures (14,693) (8,247) (50,200) (48,262)
Rotable spares expenditures (3,731) (2,882) (11,038) (24,558)
------- ------- -------- --------
Free cash flow (non-GAAP measure) $ 142,266 $ 59,375 $ 171,410 $ 130,691
========= ========= ========= =========
The company believes that free cash flow is a meaningful indicator of
cash generated for discretionary purposes.
4. Net (debt)/investment is calculated as follows:
DECEMBER 31, SEPTEMBER 30, DECEMBER 31,
2004 2004 2003
---- ---- ----
Cash, cash equivalents and other investments (GAAP
measure) $215,699 $ 124,540 $ 176,101
Less Industrial development revenue bonds and other (13,500) (13,500) (13,550)
Less Notes payable (289,510) (321,926) (190,172)
--------- ----------- ---------
Net (debt)/investment (non-GAAP measure) $(87,311) $ (210,886) $ (27,621)
========= =========== ==========
Given the significant cash, cash equivalents and other investments on
the balance sheet, a meaningful debt calculation is to net cash against
outstanding debt.
FINANCIAL INFORMATION
- ---------------------
Walden W. O'Dell and Senior Vice President and Chief Financial Officer Gregory
T. Geswein will discuss the company's financial performance during a conference
call today at 10:00 a.m. (ET). Access is available from Diebold's Web site at
www.diebold.com. The replay can also be accessed on the site for up to three
months after the call.
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PAGE 9/DIEBOLD ANNOUNCES FOURTH QUARTER RESULTS
FORWARD-LOOKING STATEMENT
- -------------------------
In the company's written or oral statements, the use of the words "believes,"
"anticipates," "expects" 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, including statements concerning future operating
performance, the company's share of new and existing markets, and the company's
short- and long-term revenue and earnings growth rates. Although the company
believes that its outlook is based upon reasonable assumptions regarding the
economy, its knowledge of its business, and on key performance indicators, which
impact the company, there can be no assurance that the company's goals will be
realized. The company is not obligated to report changes to its outlook. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The company's uncertainties could cause
actual results to differ materially from those anticipated in forward-looking
statements. These include, but are not limited to:
- competitive pressures, including pricing pressures and technological
developments;
- changes in the company's relationships with customers, suppliers,
distributors and/or partners in its business ventures;
- changes in political, economic or other factors such as currency
exchange rates, inflation rates, recessionary or expansive trends,
taxes and regulations and laws affecting the worldwide business in
each of the company's operations, including Brazil, where a
significant portion of the company's revenue is derived;
- acceptance of the company's product and technology introductions in
the marketplace;
- unanticipated litigation, claims or assessments;
- ability to reduce costs and expenses and improve internal operating
efficiencies;
- variations in consumer demand for financial self-service technologies,
products and services;
- challenges raised about reliability and security of the company's
election systems products, including the risk that such products will
not be certified for use or will be decertified;
- changes in laws regarding the company's election systems products and
services; and
- potential security violations to the company's information technology
systems.
Diebold, Incorporated is a global leader in providing integrated self-service
delivery and security systems and services. Diebold employs more than 14,000
associates with representation in nearly 90 countries worldwide and is
headquartered in Canton, Ohio, USA. Diebold reported revenue of $2.4 billion in
2004 and is publicly traded on the New York Stock Exchange under the symbol
`DBD.' For more information, visit the company's Web site at www.diebold.com.
# # #
DIEBOLD, INCORPORATED
CONDENSED CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS EXCEPT EARNINGS PER SHARE)
THREE MONTHS ENDED DECEMBER 31
2004 2003
--------- ---------
NET SALES
PRODUCT $ 381,951 $ 352,115
SERVICE 335,268 296,295
--------- ---------
TOTAL 717,219 648,410
COST OF GOODS
PRODUCT 268,028 239,685
SERVICE 248,114 216,269
--------- ---------
TOTAL 516,142 455,954
GROSS PROFIT 201,077 192,456
PERCENT OF NET SALES 28.0% 29.7%
OPERATING EXPENSES
SELLING, GENERAL AND ADMINISTRATIVE 94,395 87,707
RESEARCH, DEVELOPMENT AND ENGINEERING 14,951 16,128
--------- ---------
TOTAL 109,346 103,835
PERCENT OF NET SALES 15.2% 16.0%
OPERATING PROFIT 91,731 88,621
PERCENT OF NET SALES 12.8% 13.7%
OTHER EXPENSE AND MINORITY INTEREST, NET (958) (1,500)
--------- ---------
INCOME BEFORE TAXES 90,773 87,121
PERCENT OF NET SALES 12.7% 13.4%
TAXES ON INCOME (27,971) (27,878)
EFFECTIVE TAX RATE 30.8% 32.0%
NET INCOME $ 62,802 $ 59,243
--------- ---------
PERCENT OF NET SALES 8.8% 9.1%
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 71,485 72,633
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 72,036 73,306
BASIC EARNINGS PER SHARE $0.88 $0.82
DILUTED EARNINGS PER SHARE $0.87 $0.81
DIEBOLD, INCORPORATED
CONDENSED CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS EXCEPT EARNINGS PER SHARE)
YEAR ENDED DECEMBER 31
2004 2003
----------- -----------
NET SALES
PRODUCT $ 1,170,492 $ 1,021,386
SERVICE 1,210,418 1,088,287
----------- -----------
TOTAL 2,380,910 2,109,673
COST OF GOODS
PRODUCT 796,721 679,864
SERVICE 905,805 804,113
----------- -----------
TOTAL 1,702,526 1,483,977
GROSS PROFIT 678,384 625,696
PERCENT OF NET SALES 28.5% 29.7%
OPERATING EXPENSES
SELLING, GENERAL AND ADMINISTRATIVE 341,395 307,986
RESEARCH, DEVELOPMENT AND ENGINEERING 60,015 60,353
----------- -----------
TOTAL 401,410 368,339
PERCENT OF NET SALES 16.9% 17.5%
OPERATING PROFIT 276,974 257,357
PERCENT OF NET SALES 11.6% 12.2%
OTHER EXPENSE AND MINORITY INTEREST, NET (8,031) (334)
----------- -----------
INCOME BEFORE TAXES 268,943 257,023
PERCENT OF NET SALES 11.3% 12.2%
TAXES ON INCOME (84,986) (82,247)
EFFECTIVE TAX RATE 31.6% 32.0%
NET INCOME $ 183,957 $ 174,776
----------- -----------
PERCENT OF NET SALES 7.7% 8.3%
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 72,000 72,417
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 72,534 72,924
BASIC EARNINGS PER SHARE $2.55 $2.41
DILUTED EARNINGS PER SHARE $2.54 $2.40
DIEBOLD, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
AT DECEMBER 31
2004 2003
------------ ------------
ASSETS
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 184,045 $ 169,951
SHORT-TERM INVESTMENTS 31,654 6,150
TRADE RECEIVABLES, NET 583,658 558,161
INVENTORIES 322,293 262,039
OTHER CURRENT ASSETS 112,982 108,858
------------ ------------
TOTAL CURRENT ASSETS 1,234,632 1,105,159
SECURITIES AND OTHER INVESTMENTS 52,248 47,386
PROPERTY, PLANT AND EQUIPMENT, NET 268,090 253,155
GOODWILL 412,625 331,646
OTHER ASSETS 167,957 163,156
------------ ------------
$ 2,135,552 $ 1,900,502
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
NOTES PAYABLE $ 289,510 $ 190,172
ACCOUNTS PAYABLE 140,324 115,133
OTHER CURRENT LIABILITIES 298,789 302,506
------------ ------------
TOTAL CURRENT LIABILITIES 728,623 607,811
LONG-TERM LIABILITIES 146,454 144,453
TOTAL SHAREHOLDERS' EQUITY 1,260,475 1,148,238
------------ ------------
$ 2,135,552 $ 1,900,502
------------ ------------
DIEBOLD, INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
YEAR ENDED DECEMBER 31
2004 2003
--------- ---------
CASH FLOW FROM OPERATING ACTIVITIES:
NET INCOME $ 183,957 $ 174,776
ADJUSTMENTS TO RECONCILE NET INCOME TO CASH
PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 74,983 68,698
DEFERRED INCOME TAXES 28,486 (10,166)
LOSS ON SALE OF ASSETS, NET 412 540
MINORITY SHARE OF INCOME 7,718 7,547
CASH PROVIDED (USED) BY CHANGES IN CERTAIN ASSETS
AND LIABILITIES:
TRADE RECEIVABLES 2,293 (128,929)
INVENTORIES (52,430) (10,541)
ACCOUNTS PAYABLE 17,321 15,402
CERTAIN OTHER ASSETS AND LIABILITIES (30,092) 86,184
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NET CASH PROVIDED BY OPERATING ACTIVITIES 232,648 203,511
CASH FLOW FROM INVESTING ACTIVITIES:
PAYMENTS FOR ACQUISITIONS, NET OF CASH ACQUIRED (62,224) (10,611)
NET INVESTMENT ACTIVITY (27,739) 25,665
CAPITAL EXPENDITURES (50,200) (48,262)
ROTABLE SPARES EXPENDITURES (11,038) (24,558)
INCREASE IN CERTAIN OTHER ASSETS (33,111) (48,143)
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NET CASH USED BY INVESTING ACTIVITIES (184,312) (105,909)
CASH FLOW FROM FINANCING ACTIVITIES:
DIVIDENDS PAID (53,240) (49,242)
NET BORROWINGS (PAYMENTS) ON SHORT TERM BORROWINGS 79,688 (54,829)
REPURCHASE TREASURY SHARES (71,897) (2,739)
OTHER FINANCING ACTIVITIES 7,878 17,098
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NET CASH USED BY FINANCING ACTIVITIES (37,571) (89,712)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 3,329 6,615
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INCREASE IN CASH AND CASH EQUIVALENTS 14,094 14,505
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 169,951 155,446
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CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 184,045 $ 169,951
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