|View printer-friendly version|
|Diebold Realigns Elections Subsidiary; Lowers Full-Year Elections Revenue Expectations|
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."
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:
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,