<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 June 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
DIEBOLD, INCORPORATED
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-0183970
--------------------------------- ----------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
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.
<TABLE>
<CAPTION>
Class Outstanding at July 26, 1995
----- ----------------------------
<S> <C>
Common Shares $1.25 Par Value 30,519,676 Shares
- ------------------------------ -----------------
</TABLE>
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<PAGE> 2
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets -
June 30, 1995 and December 31, 1994 3
Condensed Consolidated Statements of Income -
Three Months and Six Months Ended
June 30, 1995 and 1994 4
Condensed Consolidated Statements of Cash Flows -
Six Months Ended June 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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<PAGE> 3
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)
<TABLE>
<CAPTION>
(Unaudited)
June 30, December 31,
1995 1994
----------- ------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 58,967 $ 17,285
Short-term investments 29,375 38,400
Trade receivables 158,458 153,107
Inventories 81,329 85,543
Prepaid expenses and other current assets 32,740 31,754
-------- --------
Total current assets 360,869 326,089
Securities and other investments 148,113 155,800
Property, plant and equipment, at cost 165,246 152,314
Less accumulated depreciation and amortization 91,551 87,601
-------- --------
73,695 64,713
Deferred income taxes 4,644 5,042
Other assets 116,840 110,239
-------- --------
$704,161 $661,883
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and other current liabilities $104,913 $108,994
Deferred income 68,626 46,470
-------- --------
Total current liabilities 173,539 155,464
Pensions 14,956 10,545
Postretirement benefits 21,680 21,627
Minority interest 14,887 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 30,594,214 and 30,515,146 shares, respectively 38,243 38,144
Additional capital 70,049 68,320
Retained earnings 385,008 365,513
Treasury shares, at cost (83,203 and 55,100 shares, respectively) (3,724) (3,186)
Other (10,477) (9,572)
-------- --------
Total shareholders' equity 479,099 459,219
-------- --------
$704,161 $661,883
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 4
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
---------------------- -----------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales
Products $130,254 $118,463 $253,343 $229,379
Services 76,646 69,618 150,604 135,466
-------- -------- -------- --------
206,900 188,081 403,947 364,845
Cost of sales
Products 79,920 77,231 159,041 149,054
Services 53,997 47,500 107,414 94,956
-------- -------- -------- --------
133,917 124,731 266,455 244,010
-------- -------- -------- --------
Gross profit 72,983 63,350 137,492 120,835
Selling and administrative expense 35,155 30,278 68,429 60,811
Research, development and engineering expense 10,040 8,997 20,146 16,997
-------- -------- -------- --------
45,195 39,275 88,575 77,808
-------- -------- -------- --------
Operating profit 27,788 24,075 48,917 43,027
Investment income 2,666 2,727 6,311 4,867
Miscellaneous, net (1,749) (1,914) (3,642) (3,697)
Minority interest (246) (788) (638) (1,408)
-------- -------- -------- --------
Income before taxes 28,459 24,100 50,948 42,789
Taxes on income 9,515 7,932 16,815 13,910
-------- -------- -------- --------
Net income $ 18,944 $ 16,168 $ 34,133 $ 28,879
======== ======== ======== ========
Weighted average number of Common Shares
outstanding 30,503 30,313 30,494 30,305
Net income per Common Share $ 0.62 $ 0.53 $ 1.12 $ 0.95
======== ======== ======== ========
Cash dividends paid per Common Share $ 0.24 $ 0.22 $ 0.48 $ 0.44
======== ======== ======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 5
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------
1995 1994
-------- --------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 34,133 $ 28,879
Adjustments to reconcile net income to cash
provided by operating activities:
Minority share of income 638 1,408
Depreciation and amortization 6,674 6,433
Other charges and amortization 8,531 8,395
Cash used by changes in certain current assets
and liabilities (3,169) (12,491)
Changes in deferred income 22,156 12,072
Other (8,967) (5,407)
--------- --------
Total adjustments 25,863 10,410
-------- --------
Net cash provided by operating activities 59,996 39,289
Cash flow from investing activities:
Proceeds from maturities of investments 53,023 40,366
Payments for purchases of investments (36,348) (47,466)
Capital expenditures (16,177) (11,484)
Increase in certain other assets (4,766) (25,069)
Other 82 505
-------- --------
Net cash used in investing activities (4,186) (43,148)
Cash flow from financing activities:
Dividends paid (14,638) (13,337)
Proceeds from issuance of Common Shares 1,290 3,404
Other (780) (1,889)
-------- --------
Net cash used in financing activities (14,128) (11,822)
-------- --------
Increase/(Decrease) in cash and cash equivalents 41,682 (15,681)
Cash and cash equivalents at the beginning of the period 17,285 39,006
-------- --------
Cash and cash equivalents at the end of the period $ 58,967 $ 23,325
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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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 six month periods ended
June 30, 1995 are not necessarily indicative of results to be expected
for the full year.
3. The Earnings 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: June 30, 1995 December 31, 1994
------------- -----------------
<S> <C> <C>
Finished goods and
service parts $18,579 $20,786
Work in process 62,619 64,617
Raw materials 131 140
------- -------
Total inventory $81,329 $85,543
======= =======
</TABLE>
5. In accordance with the provisions of Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," the Registrant classified the majority of the securities and
other investments as available-for-sale at June 30, 1995 and December
31, 1994.
6. The Registrant has reclassified the presentation of certain prior-year
information to conform with the current presentation format.
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DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 1O-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
As of June 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 June 30, 1995. Cash, cash equivalents and short-term investments
increased to $88,342 at June 30, 1995 compared to $55,685 at December 31, 1994.
These assets along with securities and other investments accounted for 34% and
32% of total assets at June 30, 1995 and December 31, 1994, respectively.
Securities and other investments consist principally of tax-free municipal
bonds, preferred stock, and other investments.
Future capital expenditures and increases in working capital are expected to be
financed through internally generated funds. The Registrant's investment
portfolio is also available for funding needs if required. External financing
is also available if needed through the Registrant's lines of credit. At June
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 June 30, 1995 improved to $15.70 from
$15.08 at December 31, 1994. The second quarter cash dividend of $.24 per
share was paid on June 9, 1995 to shareholders of record on May 19, 1995. On
July 18, 1995 the third quarter cash dividend of $.24 per share was declared
payable on September 8, 1995 to shareholders of record on August 18, 1995.
Diebold, Incorporated shares are listed on the New York Stock Exchange under
the symbol of DBD. The market price during the first six months of 1995
fluctuated within the range of $33.00 and $44.25.
Results of Operations
Second Quarter 1995 Comparison to Second Quarter 1994
Consolidated net sales for the second quarter of 1995 increased from the same
period in 1994 by $18,819 or 10%. Total gross profit increased $9,633 or 15%
over second quarter's performance for 1994. Product gross profit accounted for
the majority of this increase resulting from increased sales volume of
self-service systems and continuing cost containment efforts. Operating
expenses increased $5,920 or 15% over the same period in 1994 largely due to
higher selling and administrative expenses associated with the increase in
sales activity and expenditures related to research and development of new
products. Operating profit increased $3,713 or 15% over second quarter 1994's
performance.
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DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 1O-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
As of June 30, 1995
(Unaudited)
(Dollars in thousands)
First Half 1995 Comparison to First Half 1994
Consolidated net sales for the first half of 1995 exceeded the same period in
1994 by $39,102 or 11%. Total gross profit increased $16,657 or 14% over
1994's first half performance. Product gross profit continued to account for
the majority of this increase in total gross profit resulting from the
increased sales volume and reduction of costs resulting from manufacturing
improvements. Operating expenses increased $10,767 or 14% over the same period
in 1994 due to the higher selling and administrative expenses associated with
the increase in sales activity and expenditures related to the research and
development of new products. Operating profit for the first half 1995 exceeded
the first half 1994 by $5,890 or 14%.
The Registrant's backlog of unfilled orders was $155,967 at June 30, 1995
compared to $152,707 at June 30, 1994, a $3,260 or 2% 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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<PAGE> 9
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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<PAGE> 10
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: July 27, 1995 By: /s/Robert W. Mahoney
-------------- --------------------------------------
Robert W. Mahoney
Chairman of the Board, President
and Chief Executive Officer
Date: July 27, 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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DIEBOLD, INCORPORATED
FORM 10-Q
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<S> <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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<PAGE> 12
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<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
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-01-1995
<EXCHANGE-RATE> 1
<CASH> 58,967
<SECURITIES> 29,375
<RECEIVABLES> 158,458
<ALLOWANCES> 0
<INVENTORY> 81,329
<CURRENT-ASSETS> 360,869
<PP&E> 165,246
<DEPRECIATION> 91,551
<TOTAL-ASSETS> 704,161
<CURRENT-LIABILITIES> 173,539
<BONDS> 0
<COMMON> 38,243
0
0
<OTHER-SE> 440,856
<TOTAL-LIABILITY-AND-EQUITY> 704,161
<SALES> 253,343
<TOTAL-REVENUES> 403,947
<CGS> 159,041
<TOTAL-COSTS> 266,455
<OTHER-EXPENSES> 88,575
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 50,948
<INCOME-TAX> 16,815
<INCOME-CONTINUING> 34,133
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,133
<EPS-PRIMARY> 1.12
<EPS-DILUTED> 1.12
</TABLE>
