<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from .......... to ..........
Commission file number 1-4879
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DIEBOLD, INCORPORATED
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(Exact name of registrant as specified in its charter)
Ohio 34-0183970
- -------------------------------- ------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
P. O. Box 8230, Canton, Ohio 44711-8230
- ---------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 489-4000
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
Common Shares, as of the latest practicable date.
Class Outstanding at October 20, 1995
----- -------------------------------
Common Shares $1.25 Par Value 30,528,472 Shares
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<TABLE>
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
INDEX
<CAPTION>
Page No.
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<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets -
September 30, 1995 and December 31, 1994 3
Condensed Consolidated Statements of Income -
Three Months and Nine Months Ended
September 30, 1995 and 1994 4
Condensed Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1995 and 1994 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 8
SIGNATURES 10
INDEX TO EXHIBITS 11
</TABLE>
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<TABLE>
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
PART I - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(Dollars in thousands except per share amounts)
<CAPTION>
(Unaudited)
September 30, December 31,
ASSETS 1995 1994
- ------ ------------ ----------------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 42,730 $ 17,285
Short-term investments 29,262 38,400
Trade receivables 178,115 153,107
Inventories 85,071 85,543
Prepaid expenses and other current assets 31,746 31,754
--------- ---------
Total current assets 366,924 326,089
Securities and other investments 150,585 155,800
Property, plant and equipment, at cost 173,113 152,314
Less accumulated depreciation and amortization 94,047 87,601
---------- ----------
79,066 64,713
Deferred income taxes 4,433 5,042
Other assets 118,254 110,239
---------- ----------
$ 719,262 $ 661,883
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Accounts payable and other current liabilities $ 119,401 $ 108,994
Deferred income 55,311 46,470
---------- --------
Total current liabilities 174,712 155,464
Pensions 15,333 10,545
Postretirement benefits 21,707 21,627
Minority interest 14,290 15,028
Shareholders' equity
Preferred Shares, no par value, authorized
1,000,000 shares, none issued
Common Shares, par value $1.25, authorized 50,000,000,
issued 30,609,638 and 30,515,146 shares, respectively 38,262 38,144
Additional capital 70,319 68,320
Retained earnings 398,226 365,513
Treasury shares, at cost (83,731 and 55,100 shares, respectively) (3,749) (3,186)
Other (9,838) (9,572)
---------- ---------
Total shareholders' equity 493,220 459,219
---------- ---------
$ 719,262 $ 661,883
========= =========
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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<TABLE>
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Unaudited)
(In thousands except per share amounts)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
---------------------- ----------------------
Net sales 1995 1994 1995 1994
-------- --------- -------- --------
<S> <C> <C> <C> <C>
Products $138,720 $ 117,711 $392,063 $347,090
Services 77,280 70,488 227,884 205,954
-------- --------- -------- --------
216,000 188,199 619,947 553,044
Cost of sales
Products 85,972 76,438 245,013 225,492
Services 55,738 47,820 163,152 142,776
-------- -------- -------- --------
141,710 124,258 408,165 368,268
-------- -------- -------- --------
Gross profit 74,290 63,941 211,782 184,776
Selling and administrative expense 34,535 31,732 102,964 92,543
Research, development and engineering expense 11,170 9,339 31,316 26,336
-------- -------- -------- --------
45,705 41,071 134,280 118,879
-------- -------- -------- --------
Operating profit 28,585 22,870 77,502 65,897
Investment income 5,101 3,323 11,412 8,190
Miscellaneous, net (2,951) (1,281) (6,593) (4,978)
Minority interest (77) 81 (715) (1,327)
-------- -------- ---------- ----------
Income before taxes 30,658 24,993 81,606 67,782
Taxes on income 10,115 8,282 26,930 22,192
-------- -------- --------- ---------
Net income $ 20,543 $ 16,711 $ 54,676 $ 45,590
======== ======== ========= ========
Weighted average number of Common Shares
outstanding 30,521 30,321 30,503 30,310
Net income per Common Share $ 0.67 $ 0.55 $ 1.79 $ 1.50
======== ======== ========= ========
Cash dividends paid per Common Share $ 0.24 $ 0.22 $ 0.72 $ 0.66
======== ======== ======== ========
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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<TABLE>
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited)
(Dollars in thousands)
<CAPTION>
Nine Months Ended
September 30,
-------------------------
1995 1994
--------- ---------
<S> <C> <C>
Cash flow from operating activities:
Net income $54,676 $ 45,590
Adjustments to reconcile net income to cash
provided by operating activities:
Minority share of income 715 1,327
Depreciation and amortization 10,289 9,795
Other charges and amortization 12,305 12,275
Cash used by changes in certain
current assets and liabilities (17,077) (16,822)
Changes in deferred income 8,841 (252)
Other (3,517) (8,525)
--------- ---------
Total adjustments 11,556 (2,202)
-------- --------
Net cash provided by operating activities 66,232 43,388
Cash flow from investing activities:
Proceeds from maturities of investments 62,857 50,220
Payments for purchases of investments (49,670) (47,477)
Capital expenditures (25,419) (15,199)
Increase in certain other assets (6,808) (30,396)
Other 116 593
-------- --------
Net cash used in investing activities (18,924) (42,259)
Cash flow from financing activities:
Dividends paid (21,963) (20,007)
Proceeds from issuance of Common Shares 1,554 3,597
Other (1,454) (897)
--------- ----------
Net cash used in financing activities (21,863) (17,307)
---------- -----------
Increase/(Decrease) in cash and cash equivalents 25,445 (16,178)
Cash and cash equivalents at the beginning of the period 17,285 39,006
-------- ---------
Cash and cash equivalents at the end of the period $ 42,730 $ 22,828
======== =========
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(Unaudited)
(Dollars in thousands)
1. The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of Management, necessary
for a fair statement of the results for the interim periods.
2. The results of operations for the three month and nine month periods
ended September 30, 1995 are not necessarily indicative of results to be
expected for the full year.
3. The Net income per Common Share computations in the condensed
consolidated statements of income are based on the weighted average
number of shares outstanding during each period reported.
<TABLE>
<CAPTION>
4. Inventory detail at: September 30, 1995 December 31, 1994
------------------ -----------------
<S> <C> <C>
Finished goods and
service parts $ 18,466 $ 20,786
Work in process 66,449 64,617
Raw materials 156 140
--------- ---------
Total inventory $ 85,071 $ 85,543
======== ========
</TABLE>
5. The Registrant has reclassified the presentation of certain prior-year
information to conform with the current presentation format.
6. On October 20, 1995, the Registrant entered into a merger agreement to
purchase the stock of Griffin Technology Incorporated (Griffin) based in
Farmington, New York. Griffin shares are traded on the NASDAQ National
Market under the symbol of GRIF. Pursuant to the merger agreement, the
Registrant will commence a tender offer for all issued and outstanding
shares of Griffin for $7.75 per share in cash.
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DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
As of September 30, 1995
(Unaudited)
(Dollars in thousands except for per share data)
Changes in Financial Condition
- ------------------------------
The balance sheet of the Registrant continued to reflect a strong financial
position at September 30, 1995. Cash, cash equivalents and short-term
investments increased to $71,992 at September 30, 1995 compared to $55,685 at
December 31, 1994. These assets along with securities and other investments
accounted for 31% and 32% of total assets at September 30, 1995 and December
31, 1994, respectively. Securities and other investments consist principally
of tax-free municipal bonds, preferred stock, and other investments.
Trade receivables have increased consistent with the increase in volumes. As a
percentage of consolidated net sales for the prior 12 months, trade receivables
are at 21 percent at September 30, 1995 compared to 20 percent at December 31,
1994.
Increase in property plant and equipment, at cost is primarily due to new
construction and remodeling of facilities and the purchase of equipment to
support increased engineering efforts.
Future capital expenditures and increases in working capital are expected to be
financed through internally generated funds. The Registrant's investment
portfolio is available for funding needs if required. External financing is
also available if needed through the Registrant's lines of credit. At
September 30, 1995, the Registrant had unused lines of credit approximating
$40,000 and the Registrant is not restricted as to the use of funds borrowed
under these credit agreements. Therefore, such commitments represent an
additional and immediate source of liquidity. The Registrant's strong
financial position enhances its ability to obtain additional funds if required.
Shareholders' equity per Common Share at September 30, 1995 improved to $16.16
from $15.08 at December 31, 1994. The third quarter cash dividend of $.24 per
share was paid on September 8, 1995 to shareholders of record on August 18,
1995. On October 17, 1995 the fourth quarter cash dividend of $.24 per share
was declared payable on December 8, 1995 to shareholders of record on November
17, 1995. Diebold, Incorporated shares are listed on the New York Stock
Exchange under the symbol of DBD. The market price during the first nine
months of 1995 fluctuated within the range of $33.00 and $49.38.
Results of Operations
- ---------------------
Third Quarter 1995 Comparison to Third Quarter 1994
- ---------------------------------------------------
Consolidated net sales for the third quarter of 1995 increased from the same
period in 1994 by $27,801 or 15%. Total gross profit increased $10,349 or 16%
over third quarter's performance for 1994. Product gross profit accounted for
this increase resulting from the increased sales volume of self service systems
and continuing cost containment efforts. Operating expenses increased $4,634
or 11% over the same period in 1994 largely due to an increase of 20% in
expenditures related to research and development of new products. There was
also higher selling and administrative expenses associated with the increase in
sales activity. Operating profit increased $5,715 or 25% over third quarter
1994's performance.
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DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
As of September 30, 1995
(Unaudited)
(Dollars in thousands)
Nine-Month 1995 Comparison to Nine-Month 1994
- ---------------------------------------------
Consolidated net sales for the nine months ended 1995 exceeded the same period
in 1994 by $66,903 or 12%. Total gross profit increased $27,006 or 15% over
1994's performance. Product gross profit continued to account for the majority
of this increase in total gross profit due to the increased sales volume and
reduction of costs resulting from manufacturing improvements. Operating
expenses increased $15,401 or 13% over the same period in 1994 due to a 19%
increase in expenditures related to the research and development of new
products. There was also higher selling and administrative expenses associated
with the increase in sales activity. Operating profit for the nine months
ended September 30, 1995 exceeded the same period in 1994 by $11,605 or 18%.
The Registrant's backlog of unfilled orders was $169,308 at September 30, 1995
compared to $147,268 at September 30, 1994, a $22,040 or 15% increase. The
Registrant believes, however, that order backlog information is not, by itself,
a meaningful indicator of future revenue streams. There are numerous factors
which influence the amount and timing of revenue recognized in future periods.
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1(i) Amended and Restated Articles of Incorporation of Diebold,
Incorporated -- incorporated by reference to Exhibit 3.1(i) of
Registrant's Annual Report on Form 10-K for the year ended December
31, 1994.
3.1(ii) Code of Regulations -- incorporated by reference to Exhibit 4(c) to
Registrant's Post-Effective Amendment No. 1 to Form S-8
Registration Statement No. 33-32960.
3.2 Certificate of Amendment by Shareholders to Amended Articles of
Incorporation of Diebold, Incorporated -- incorporated by reference
to Exhibit 3.1 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992.
4. Rights Agreement dated as of February 10, 1989 between Diebold,
Incorporated and Ameritrust Company National Association --
incorporated by reference to Exhibit 2.1 to Registrant's
Registration Statement on Form 8-A dated February 10, 1989.
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ITEM 6. Exhibits and Reports on Form 8-K (continued)
* 10.1 Form of Employment Agreement as amended and restated as of
September 13, 1990 -- incorporated by reference to Exhibit 10.1 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1990.
* 10.2 Schedule of Certain Officers who are Parties to Employment
Agreements in the form of Exhibit 10.1. -- incorporated by
reference to Exhibit 10.2 to Registrant's Annual Report on Form
10-K for the year ended December 31, 1992.
* 10.3 Supplemental Pension Agreement with Raymond Koontz -- incorporated
by reference to Exhibit 10.3 of Registrant's Annual Report on Form
10-K for the year ended December 31, 1994.
* 10.4 Supplemental Retirement Benefit Agreement with Robert W. Mahoney --
incorporated by reference to Exhibit 10.4 of Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994.
* 10.5 Supplemental Employee Retirement Plan (as amended January 1, 1994)
-- incorporated by reference to Exhibit 10.5 of Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994.
10.6 Amended and Restated Partnership Agreement dated as of September
12, 1990 -- incorporated by reference to Exhibit 10 to Registrant's
Form 8-K dated September 26, 1990.
* 10.7 1985 Deferred Compensation Plan for Directors of Diebold,
Incorporated -- incorporated by reference to Exhibit 10.7 to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1992.
* 10.8 1991 Equity and Performance Incentive Plan -- incorporated by
reference to Exhibit 4(a) to Registrant's Form S-8 Registration
Statement No. 33-39988.
* 10.9 Long-Term Executive Incentive Plan -- incorporated by reference to
Exhibit 10.9 of Registrant's Annual Report on Form 10-K for the
year ended December 31, 1993.
* 10.10 1992 Deferred Incentive Compensation Plan (as amended and restated
as of July 1, 1993) -- incorporated by reference to Exhibit 10.10
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993.
* 10.11 Annual Incentive Plan -- incorporated by reference to Exhibit 10.11
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992.
* 10.12 Employment Agreement with Robert P. Barone -- incorporated by
reference to Exhibit 10.12 to Registrant's Form 10-Q for the
quarter ended September 30, 1994.
27. Financial Data Schedule.
(b) Reports on Form 8-K.
No reports have been filed by the Registrant on Form 8-K during the
period covered by this report.
* Reflects management contract or other compensatory arrangement.
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DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
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: October 24, 1995 By: /s/Robert W. Mahoney
----------------- -----------------------------------
Robert W. Mahoney
Chairman of the Board, President
and Chief Executive Officer
Date: October 24, 1995 By: /s/Gerald F. Morris
----------------- -----------------------------------
Gerald F. Morris
Executive Vice President and
Chief Financial Officer
(Principal Accounting and
Financial Officer)
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<TABLE>
DIEBOLD, INCORPORATED
FORM 10-Q
INDEX TO EXHIBITS
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<S> <C> <C> <C>
3.1 (i) Amended and Restated Articles of Incorporation of Diebold,
Incorporated -- incorporated by reference to Exhibit 3.1(i)
of Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994. --
3.1 (ii) Code of Regulations -- incorporated by reference to Exhibit 4(c) to
Registrant's Post-Effective Amendment No. 1 to Form S-8 Registration
Statement No. 33-32960. --
3.2 Certificate of Amendment by Shareholders to Amended Articles of
Incorporation of Diebold, Incorporated -- incorporated by reference to
Exhibit 3.1 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992. --
4. Rights Agreement dated as of February 10, 1989 between Diebold,
Incorporated and Ameritrust Company National Association --
incorporated by reference to Exhibit 2.1 to Registrant's
Registration Statement on Form 8-A dated February 10, 1989. --
10.1 Form of Employment Agreement as amended and restated as of
September 13, 1990 -- incorporated by reference to Exhibit 10.1
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1990. --
10.2 Schedule of Certain Officers who are Parties to Employment Agreements
in the form of Exhibit 10.1. -- incorporated by reference to Exhibit
10.2 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992. --
10.3 Supplemental Pension Agreement with Raymond Koontz -- incorporated
by reference to Exhibit 10.3 of Registrant's Annual Report on
Form 10-K for the year ended December 31, 1994. --
10.4 Supplemental Retirement Benefit Agreement with Robert W. Mahoney --
incorporated by reference to Exhibit 10.4 of Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994. --
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
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<S> <C> <C>
10.5 Supplemental Employee Retirement Plan (as amended January 1,
1994) -- incorporated by reference to Exhibit 10.5 of
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994. --
10.6 Amended and Restated Partnership Agreement dated as of September 12,
1990 -- incorporated by reference to Exhibit 10 to Registrant's Form 8-K
dated September 26, 1990. --
10.7 1985 Deferred Compensation Plan for Directors of Diebold,
Incorporated -- incorporated by reference to Exhibit 10.7
to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992. --
10.8 1991 Equity and Performance Incentive Plan -- incorporated by
reference to Exhibit 4(a) to Registrant's Form S-8 Registration
Statement No. 33-39988. --
10.9 Long-Term Executive Incentive Plan -- incorporated by reference to
Exhibit 10.9 of Registrant's Annual Report on Form 10-K for the
year ended December 31, 1993. --
10.10 1992 Deferred Incentive Compensation Plan (as amended and restated
as of July 1, 1993) -- incorporated by reference to Exhibit 10.10
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993. --
10.11 Annual Incentive Plan -- incorporated by reference to Exhibit 10.11
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992. --
10.12 Employment Agreement with Robert P. Barone -- incorporated by
reference to Exhibit 10.12 to Registrant's Form 10-Q for the
quarter ended September 30, 1994. --
27. Financial Data Schedule. 13
</TABLE>
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<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 42,730
<SECURITIES> 29,262
<RECEIVABLES> 178,115
<ALLOWANCES> 0
<INVENTORY> 85,071
<CURRENT-ASSETS> 366,924
<PP&E> 173,113
<DEPRECIATION> 94,047
<TOTAL-ASSETS> 719,262
<CURRENT-LIABILITIES> 174,712
<BONDS> 0
<COMMON> 38,262
0
0
<OTHER-SE> 468,545
<TOTAL-LIABILITY-AND-EQUITY> 719,262
<SALES> 392,063
<TOTAL-REVENUES> 619,947
<CGS> 245,013
<TOTAL-COSTS> 408,165
<OTHER-EXPENSES> 134,280
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 81,606
<INCOME-TAX> 26,930
<INCOME-CONTINUING> 54,676
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54,676
<EPS-PRIMARY> 1.79
<EPS-DILUTED> 1.79
</TABLE>
