NORTH CANTON, Ohio, Aug. 16 /PRNewswire-FirstCall/ -- Diebold,
Incorporated (NYSE: DBD) announced today that it is creating a new structure
for its Diebold Election Systems subsidiary, allowing it to operate more
independently, and is revising its full-year revenue expectations associated
with this business.
New Structure for Elections Subsidiary
Diebold and its financial consultants have been actively engaged with a
number of strategic companies and private investors with the intent to divest
the Diebold Election Systems subsidiary. These efforts to sell this company,
however, have proven unsuccessful due in part to the rapidly evolving
political uncertainties and controversies surrounding state and jurisdiction
purchases of electronic voting systems. Given this changing business
environment and the recent downturn in the capital markets, Diebold has
postponed its efforts to divest the company and instead is realigning the
election systems subsidiary to allow it to operate as a more independent
entity, with Diebold maintaining a financial interest in the company.
Among the changes that will be enacted are establishing a separate board
which will include independent directors to oversee the new entity, and
creating a new management structure to effectively support the election
systems company. Dave Byrd will remain president of this company and will
report to the new board of directors. Additionally, a formal name change and
other details will be announced by the election systems business in the very
near future.
Revised Elections Revenue Expectations
As a result of the rapidly changing political environment and pending
legislative initiatives related to electronic voting, several large
anticipated orders for electronic voting systems have moved from 2007 into
2008 and beyond. Competing federal legislation in the U.S. House of
Representatives and U.S. Senate, both related to the use of specific elections
technologies, has created uncertainty amongst the jurisdictions that make
purchasing decisions. In addition, several states have initiated separate,
independent reviews of voting technology within their jurisdictions. These
combined actions, along with decisions by certain key states to move up their
primary elections to very early in 2008, have significantly delayed purchasing
decisions throughout the election systems industry.
Therefore, the company is lowering its full-year revenue expectations for
the elections business by approximately $120 million and estimates this
revenue adjustment will adversely impact its full-year earnings per share by
approximately $0.27. Diebold's previous full-year revenue guidance for this
business had been $185 million to $215 million.
Diebold will continue to provide the necessary resources and support for
the election systems business to operate efficiently and successfully. In the
longer term, however, Diebold has not ruled out the possibility of divesting a
portion or all of its ownership in the newly realigned company.
"Given our concerted evaluation of all strategic alternatives available to
us at this time, this is the most appropriate course of action for Diebold and
all its stakeholders," said Thomas W. Swidarski, president and chief executive
officer of Diebold, Incorporated. "While the pending federal legislation has
created uncertainty in the near term, each of the proposed bills provides for
substantial, additional funding for electronic voting systems. The elections
business has a strong, competitive position that will allow it to take full
advantage of opportunities that arise as this market continues to evolve.
"While we plan to fully support this business for the foreseeable future,
we feel a more independent structure should allow it to operate more
effectively," Swidarski continued. "Establishing the elections business as a
separate entity will also allow our senior management team to fully focus our
efforts on Diebold's core global businesses in financial self-service and
security. These core businesses represented more than 92 percent of our total
revenue in 2006."
Forward-Looking Statements
In this press release, statements that are not reported financial results
or other historical information are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Forward-
looking statements give current expectations or forecasts of future events and
are not guarantees of future performance. These forward-looking statements
relate to, among other things, the future results of the elections business.
The use of the words "believes," "anticipates," "expects," "intends" and
similar expressions is intended to identify forward-looking statements that
have been made and may in the future be made by or on behalf of the company.
Although the company believes that these forward-looking statements are based
upon reasonable assumptions, these forward-looking statements involve risks,
uncertainties and other factors that may cause actual results to differ
materially from those expressed in or implied by the forward-looking
statements. The company is not obligated to update forward-looking statements,
whether as a result of new information, future events or otherwise.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Some of the risks,
uncertainties and other factors that could cause actual results to differ
materially from those expressed in or implied by the forward-looking
statements include, but are not limited to:
- acceptance of the company's product and technology introductions in the
marketplace;
- unanticipated litigation, claims or assessments;
- 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, including pending legislative initiatives;
- the outcome of independent reviews of voting technology that several
states have undertaken;
- potential security violations to the company's information technology
systems; and
- the company's ability to successfully execute its strategy related to
the election systems business
About Diebold
Diebold, Incorporated is a global leader in providing integrated self-
service delivery and security systems and services. Diebold employs more than
15,000 associates with representation in nearly 90 countries worldwide and is
headquartered in Canton, Ohio, USA. Diebold reported revenue of $2.9 billion
in 2006 and is publicly traded on the New York Stock Exchange under the symbol
'DBD.' For more information, visit the company's Web site at
http://www.diebold.com.
SOURCE: Diebold, Incorporated
CONTACT: Media Relations, Mike Jacobsen, +1-330-490-3796,
michael.jacobsen@diebold.com, or Investor Relations, Jennifer Bako,
+1-330-490-6318, jennifer.bako@diebold.com, both of Diebold, Incorporated
Web site: http://www.diebold.com
