<PAGE> 1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------------------------------
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 March 31, 1999
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 Identification Number)
of incorporation or organization)
5995 Mayfair Road, P.O. Box 3077, North Canton, Ohio 44720-8077
- ----------------------------------------------------- ---------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (330) 490-4000
- --------------------------------------------------------------------------------
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 April 28, 1999
----- -----------------------------
Common Shares $1.25 Par Value 68,950,964 Shares
- ---------------------------------- -----------
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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 -
March 31, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Income -
Three Months Ended March 31, 1999 and 1998 4
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1999 and 1998 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders 12
ITEM 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
INDEX TO EXHIBITS 15
</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)
March 31, December 31,
1999 1998
----------- -----------
<S> <C> <C>
ASSETS
- ------
Current assets
Cash and cash equivalents $ 45,152 $ 42,540
Short-term investments 36,017 37,433
Trade and notes receivable 286,137 266,891
Inventories 132,854 127,880
Prepaid expenses and other current assets 69,529 68,804
----------- -----------
Total current assets 569,689 543,548
Securities and other investments 215,093 168,008
Property, plant and equipment, at cost 281,644 278,435
Less accumulated depreciation and amortization 136,155 131,304
----------- -----------
145,489 147,131
Finance receivables 60,384 65,573
Other assets 78,863 79,928
----------- -----------
$ 1,069,518 $ 1,004,188
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Accounts payable and other current liabilities $ 180,983 $ 177,548
Deferred income 100,332 57,985
----------- -----------
Total current liabilities 281,315 235,533
Bonds payable 20,800 20,800
Pensions 23,606 22,745
Postretirement benefits 22,283 22,246
Minority interest 3,379 3,741
Shareholders' equity
Preferred Shares, no par value, authorized
1,000,000 shares, none issued
Common Shares, par value $1.25, authorized
125,000,000, issued 69,584,635 and
69,494,483 shares, respectively; outstanding 68,949,164
and 68,880,761 shares, respectively 86,982 86,868
Additional capital 45,187 43,281
Retained earnings 623,010 604,227
Treasury shares, at cost (635,471 and 613,722 shares, respectively) (22,646) (21,902)
Accumulated other comprehensive income (13,282) (12,802)
Other (1,116) (549)
----------- -----------
Total shareholders' equity 718,135 699,123
----------- -----------
$ 1,069,518 $ 1,004,188
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-3-
<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
March 31,
1999 1998
--------- ---------
<S> <C> <C>
Net Sales
Products $ 169,113 $ 193,130
Services 114,370 102,609
--------- ---------
283,483 295,739
Cost of sales
Products 101,344 118,063
Services 81,051 75,541
--------- ---------
182,395 193,604
Gross profit 101,088 102,135
Selling and administrative expense 47,457 49,746
Research, development and engineering expense 11,951 14,930
--------- ---------
59,408 64,676
Operating profit 41,680 37,459
Investment income 4,793 4,713
Miscellaneous, net (971) (946)
Minority interest 362 (233)
--------- ---------
Income before taxes 45,864 40,993
Taxes on income 16,740 14,143
--------- ---------
Net income $ 29,124 $ 26,850
========= =========
Basic weighted - average shares outstanding 68,927 69,045
Diluted weighted - average shares outstanding 69,177 69,647
Basic earnings per share $ 0.42 $ 0.39
Diluted earnings per share $ 0.42 $ 0.39
Cash dividends paid per Common Share $ 0.15 $ 0.14
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-4-
<PAGE> 5
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1999 1998
---------- ---------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 29,124 $ 26,850
Adjustments to reconcile net income to cash
provided by operating activities:
Minority share of income (362) 233
Depreciation 5,801 4,507
Other charges and amortization 3,636 2,815
Cash used by changes in certain
current assets and liabilities (36,940) (18,564)
Changes in deferred income 42,347 36,776
Other 16,870 4,136
-------- --------
Net cash provided by operating activities 60,476 56,753
Cash flow from investing activities:
Proceeds from maturities and sales of investments 6,507 16,450
Payments for purchases of investments (53,995) (16,338)
Capital expenditures (4,204) (11,361)
Increase in certain other assets (2,592) (1,989)
Investment in customer financing 5,485 (7,809)
Other -- (63)
-------- --------
Net cash used by investing activities (48,799) (21,110)
Cash flow from financing activities:
Dividends paid (10,341) (9,669)
Issuance and repurchase of Common Shares 1,276 478
Distribution for purchase of IBM's share of
minority interest in InterBold -- (16,141)
-------- --------
Net cash used by financing activities (9,065) (25,332)
-------- --------
Increase in cash and cash equivalents 2,612 10,311
Cash and cash equivalents at the beginning of the period 42,540 20,296
-------- --------
Cash and cash equivalents at the end of the period $ 45,152 $ 30,607
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-5-
<PAGE> 6
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(Unaudited)
(In thousands except per share amounts)
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. The condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto together with
management's discussion and analysis of financial condition and results of
operations contained in the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1998. In addition, the Registrant's statements
in this Form 10-Q report may be considered forward-looking and involve
risks and uncertainties that could significantly impact expected results.
A discussion of these risks and uncertainties is contained in the
management's discussion and analysis of financial condition and results of
operations in this Form 10-Q. The results of operations for the three
month period ended March 31, 1999 are not necessarily indicative of
results to be expected for the full year.
2. The basic and diluted earnings per share computations in the condensed
consolidated statements of income are based on the weighted-average number
of shares outstanding during each period reported. The following data show
the amounts used in computing earnings per share and the effect on the
weighted-average number of shares of dilutive potential common stock.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1999 1998
------------ ------------
<S> <C> <C>
Numerator:
Income used in basic and diluted
earnings per share $ 29,124 $ 26,850
Denominator:
Basic weighted-average shares 68,927 69,045
Effect of dilutive potential common stock
250 602
------------ ------------
Diluted weighted-average shares 69,177 69,647
------------ ------------
Basic earnings per share $ 0.42 $ 0.39
Diluted earnings per share $ 0.42 $ 0.39
Anti-dilutive shares not used in
calculating diluted weighted-average
shares 1,325 169
</TABLE>
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<PAGE> 7
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
----------------------------------------------------------------
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
3. Inventory detail at: March 31, 1999 December 31, 1998
-------------- -----------------
<S> <C> <C>
Finished goods and
service parts $ 53,419 $ 43,835
Work in process 79,244 83,873
Raw materials 191 172
-------- --------
Total inventory $132,854 $127,880
======== ========
</TABLE>
4. The Registrant has reclassified the presentation of certain prior-year
information to conform with the current presentation format.
5. The Registrant displays the accumulated balance of other comprehensive
income separately from retained earnings and additional capital in the
equity section of the Balance Sheet. Items considered to be other
comprehensive income include adjustments made for foreign currency
translation (under Statement 52), pensions (under Statement 87) and
unrealized holding gains and losses on available-for-sale securities
(under Statement 115). Comprehensive income for the three months ended
March 31, 1999 and 1998 was $28,644 and $27,102, respectively.
6. In the second quarter of 1998, the Registrant recognized realignment and
special charges of $61,117 ($41,850 after-tax or $0.60 per diluted share)
in connection with a corporate-wide realignment program. Exit costs were
accounted for under EITF 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity
(Including Certain Costs Incurred in a Restructuring)." Long-lived asset
impairments were accounted for under Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed of." Inventory related charges
were taken when it was determined that the utility, as a result of the
realignment decisions, was less than the cost for the affected inventory.
Elements of the realignment and special charges were divided into three
categories: facility closing and write down of assets, employee associate
costs and other exit costs. Facility closing and write down of assets
costs were estimated to be $40,343. Items included in this category were
certain impaired intangible assets, mainly relating to the separation
from IBM in the InterBold joint venture in 1998, manufacturing assets
relating to exited businesses, redundant inventory of exited businesses
and contractual costs to exit leased facilities. North American
facilities were consolidated and several facilities were closed under the
realignment program.
Termination pay and separation costs were estimated to be $8,269. More
than 600 employee associates were estimated to be terminated. At March
31, 1999, 560 jobs had been terminated. The estimated costs in this
category included the termination pay, job outplacement and fringe
benefit costs for each eliminated job. Terminations came from all areas
of the corporation.
Other exit costs under the realignment program were estimated to be
$12,505. These costs included legal, insurance and communications costs
and the write-off of accounts receivable relating to exited businesses.
Assets relating to the realignment were written down or scrapped. Costs
from the realignment will be paid from operating funds over the term of
the realignment plan. The anticipated completion date for the majority of
costs relating to the plan is expected to be by the end of 1999.
-7-
<PAGE> 8
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
----------------------------------------------------------------
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Facility Closing Employee Other
and Write Down Associate Exit
of Assets Costs Costs Total
----------------- --------------- --------------- -------------
<S> <C> <C> <C> <C>
Realignment accrual at December 31, 1998 $ 2,077 $ 4,576 $ 4,595 $11,248
1st quarter activity (307) (490) (1,100) (1,897)
-----------------------------------------------------------------------
Balance at March 31, 1999 $ 1,770 $ 4,086 $ 3,495 $ 9,351
=======================================================================
</TABLE>
7. The Registrant has defined its operating segments into four main areas:
North American Sales and Service (NASS), International Sales and Service
(ISS), Manufacturing and Development (M&D) and Corporate. These segments
are organized under the supervision of the Diebold Executive Management
Team and are evaluated based on the following information presented:
revenues from customers, revenues from inter-segment transactions, and
operating profit contribution to the total corporation. All inter-segment
transactions are eliminated to arrive at the total corporation revenue
and operating profit. All income and expense items below operating profit
are not allocated to the segments and are not disclosed.
NASS sells and services financial and retail systems in the United States
and Canada. NASS also has customer revenues on the servicing of medical
systems in the United States and Canada. ISS sells and services
financial, retail, educational and medical systems over the remainder of
the globe. M&D designs, develops and manufactures the equipment sold to
NASS and ISS and also sells medical and educational systems to external
North American customers. 1998 financial information has been restated to
show all revenues from IBM reclassified to the ISS segment from the M&D
segment. As permitted under Statement 131, certain information not
routinely used in the management of these segments, information not
allocated back to the segments or information that is impractical to
report is not shown. Items not disclosed are as follows: interest
revenue, interest expense, depreciation, amortization expense, equity in
the net income of investees accounted for by the equity method, income
tax expense or benefit, extraordinary items, significant non-cash items
and long-lived assets.
<TABLE>
<CAPTION>
NORTH
AMERICAN INTERNATIONAL MANUFACTURING
SALES AND SALES AND & DEVELOPMENT CORPORATE/
SERVICES SERVICES ELIMINATION TOTAL
<S> <C> <C> <C> <C> <C>
1ST QUARTER 1999 SEGMENT INFORMATION BY GROUP
Customer revenues $224,602 $ 51,864 $ 6,634 $ 383 $283,483
Inter-segment revenues 716 166 151,189 (152,071) --
Operating profit 38,076 45 14,685 (11,126) 41,680
1ST QUARTER 1998 SEGMENT INFORMATION BY GROUP
Customer revenues 221,792 66,817 6,452 678 295,739
Inter-segment revenues 6,856 -- 161,438 (168,294) --
Operating profit 30,205 10,784 8,366 (11,896) 37,459
</TABLE>
-8-
<PAGE> 9
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
As of March 31, 1999
(Unaudited)
(Dollars in thousands except for per share data)
Changes in Financial Condition
- ------------------------------
The Registrant continued to show a strong balance sheet at March 31, 1999. Total
assets increased to $1,069,518 at March 31, 1999 from $1,004,188 at December 31,
1998. Cash, cash equivalents and short-term investments increased to $81,169 at
March 31, 1999 from $79,973 at December 31, 1998. These assets along with
securities and other investments accounted for 28% of total assets at March 31,
1999 and 25% of total assets at December 31, 1998. 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 primarily through internally generated funds. The Registrant's
investment portfolio is available for any funding needs if required. External
financing is also available if needed through the Registrant's lines of credit.
At March 31, 1999, the Registrant had unused lines of credit approximating
$150,000, all unrestricted as to use. These lines of credit represent an
additional and immediate source of liquidity.
Shareholders' equity per Common Share at March 31, 1999 increased to $10.42 from
$10.15 at December 31, 1998. The first quarter cash dividend of $0.15 per share
was paid on March 12, 1999 to shareholders of record on February 19, 1999. On
April 21, 1999 the second quarter cash dividend of $0.15 per share was declared
payable on June 4, 1999 to shareholders of record on May 14, 1999. Diebold,
Incorporated shares are listed on the New York Stock Exchange under the symbol
of DBD. The market price during the first three months of 1999 fluctuated within
the range of $22.06 and $39.88.
Results of Operations
- ---------------------
First Quarter of 1999 Comparison to First Quarter of 1998
- ---------------------------------------------------------
Overall, net sales for the first quarter of 1999 decreased from the same period
in 1998 by $12,256 or 4 percent due mainly to decreased shipments of
self-service terminals in the international market. As the Registrant continues
to set up its own international sales channels due to the Registrant replacing
IBM as its primary international distribution channel, fewer product sales to
IBM have been recorded. The Registrant expects the downturn in sales to IBM to
continue, but to be offset by increased sales through its new international
sales channels over time. Net service sales for the quarter were up from the
prior year by $11,761 or 11.5 percent. Total gross profit decreased $1,047 or 1
percent from the first quarter's results in 1998, while gross margins of 35.7
percent increased over the prior year's gross margin of 34.5 percent. Operating
expenses decreased $5,268 or 8 percent from the same period in 1998, largely due
to the Registrant's cost containment efforts.
The Registrant's operating results and the amount and timing of revenue are
affected by numerous factors including production schedules, customer
priorities, sales volume, and sales mix. During the past several years, the
Registrant has dramatically changed the focus of its self-service business to
that of a total solutions approach. The value of unfilled orders is not a
meaningful indicator of future revenues due to the significant portion of
revenues derived from the Registrant's growing service-based business, for which
order information is not recorded. Therefore, the Registrant believes that
backlog information is not material to an understanding of its business and does
not disclose backlog information.
-9-
<PAGE> 10
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
As of March 31, 1999
(Unaudited)
(Dollars in thousands except for per share data)
Corporate Realignment Charge
- ----------------------------
In the second quarter of 1998, the Registrant recorded realignment and special
charges of $61,117 ($41,850 after tax or $0.60 per diluted share). The majority
of the realignment charge related to three areas: the ending of the InterBold
joint venture with IBM, the exiting of the manufacturing and distribution
channel for certain low-end self-service terminal products and the exiting of
the proprietary electronic security business. The realignment charge was made up
of two components: A special charge of $9,864 for the write-off of primarily
inventory from exited lines of business and a realignment charge of $51,253 for
all other realignment costs.
Industry-wide banking trends such as bank mega-mergers, as well as the
transition from IBM to the Registrant's own international distribution channels,
prompted the re-evaluation of the Registrant's business plans and organizational
structure. North American facilities were consolidated and certain facilities
were closed. More than 600 jobs were estimated to be eliminated. At March 31,
560 jobs had been terminated. The Registrant estimated savings of $22,000
annually from the realignment program.
Segment Information
- -------------------
NASS customer revenues increased in the first quarter 1999 to $224,602 from
$221,792 in the first quarter of 1998. The increase was primarily attributable
to increased domestic service sales. NASS also showed increased operating
profitability in the first quarter of 1999 by increasing operating profit as a
percentage of customer revenue from 13.6 percent in 1998 to 17.0 percent in
1999.
The Registrant continued in the first quarter to aggressively expand its
international distribution channels to replace IBM. New subsidiaries have been
established in Argentina, Colombia, Poland and Thailand. In addition, the
Registrant is rapidly expanding its presence in Europe. ISS customer revenues
were down in comparison to the prior year by $14,953 or 22 percent due mainly to
decreased sales to IBM. ISS operating profits were eroded in the first quarter
due to international set up costs, lower volumes and tough comparisons to the
prior year in the Latin America region.
M&D operating profit was up by $6,319, or 78 percent over 1998 primarily due to
increased inter-company software sales to NASS, and cost reduction efforts by
the ATM manufacturing unit.
Year 2000 Disclosure
- --------------------
The Registrant is highly committed to providing products and systems that are
ready to operate in the year 2000 and beyond. Strategic initiatives have been
under way to address the readiness of products delivered to our customers,
corporate business systems, and the readiness of our suppliers. All of these
initiatives are in place to assist in the continued delivery of products and
services to our customers without interruption.
-10-
<PAGE> 11
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
As of March 31, 1999
(Unaudited)
(Dollars in thousands except for per share data)
The Registrant is actively pursuing the year 2000 readiness of its corporate
systems. The project was initiated in 1996 within the Global Support
organization. Corporate applications have been inventoried and categorized as
active, inactive, or year 2000 ready. To assist in this process and verify the
results, the Registrant is pursuing the evaluation and remediation, if
necessary, of all of the active applications including service invoicing,
customer information systems, service systems, dispatch systems, and financial
systems. A new enterprise system, verified to be year 2000 ready by the system
provider, is being installed that addresses manufacturing, order entry, and
links to the other corporate applications.
The Registrant's corporate information systems project program changes were
completed in the first quarter of 1999, while testing will continue throughout
1999. As required by standard accounting practice, the Registrant is expensing
as incurred all costs associated with these systems changes. The costs are not
expected to have a material effect on the Registrant's financial position or
results of operations.
A project is also under way to contact suppliers to assess their level of
readiness for operating in the year 2000 and beyond. The Registrant will
evaluate the readiness of the suppliers and take appropriate steps to develop a
confidence that they will experience continued operation without interruption in
business.
The Registrant has formed an Oversight Committee to continually review issues
related to the year 2000 requirements. This Committee, consisting of senior
management members, remains focused on the completion of all year 2000 related
initiatives, and appropriation of sufficient resources to ensure timely
completion of year 2000 activities. Additional year 2000 information on products
and services can be found on the Registrant's Web site at www.diebold.com.
Forward-Looking Statement Disclosure
- ------------------------------------
In the Registrant's written or oral statements, the use of the words "believes,"
"anticipates," "expects" and similar verbs is intended to identify
forward-looking statements which have been made and may in the future be made by
or on behalf of the Registrant, including statements concerning future operating
performance, the Registrant's share of new and existing markets, and the
Registrant's short- and long-term revenue and earnings growth rates. The
Registrant gives no assurance that its goals will be realized, and it is under
no obligation to report changes to its outlook. Readers are cautioned not to
place undue reliance on these forward-looking statements. The Registrant's
uncertainties could cause actual results to differ materially from those
anticipated in forward-looking statements. These include, but are not limited
to:
- - competitiveness pressures, including pricing pressures and technological
developments;
- - changes in the Registrant'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
Registrant's operations;
- - acceptance of the Registrant's product and technology introductions in the
marketplace;
- - unanticipated litigation, claims or assessments;
- - the ability to replace revenues generated by IBM as its primary
international distributor; and
- - the ability to implement the steps of the corporate realignment program.
-11-
<PAGE> 12
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 1O-Q
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders
The Registrant's annual meeting of shareholders was held on April
21, 1999. Each matter voted upon at such meeting and the number of shares cast
for, against or withheld, and abstained are as follows:
<TABLE>
<CAPTION>
1. Election of Directors
-----------------------------
For Withheld
---------------------- ----------------------
<S> <C> <C>
Louis V. Bockius III 60,106,347 829,286
Richard L. Crandall 60,107,935 827,698
Donald R. Gant 60,053,194 882,439
L. Lindsey Halstead 60,083,636 851,997
Phillip B. Lassiter 60,126,491 809,142
John N. Lauer 60,104,524 831,109
Robert W. Mahoney 60,057,716 877,917
William F. Massy 60,102,742 832,891
W. R. Timken, Jr. 60,100,502 835,131
2. Ratification of Appointment of KPMG LLP as Independent Auditors for 1999.
For: 60,254,876 Against: 344,607 Abstain: 336,150
</TABLE>
There were no broker non-votes.
-12-
<PAGE> 13
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 1O-Q
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 3.2 to Registrant's Form 10-Q for the quarter ended
March 31, 1996.
3.3 Certificate of Amendment to Amended Articles of Incorporation of
Diebold, Incorporated -- incorporated by reference to Exhibit 3.3
of Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998.
4. Rights Agreement dated as of February 11, 1999 between Diebold,
Incorporated and the Bank of New York -- incorporated by reference
to Exhibit 4.1 to Registrant's Registration Statement on Form 8-A
dated February 11, 1999.
*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 Form 10-Q for the quarter ended
June 30, 1998.
*10.5 (i) 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.
*10.5 (ii) Amendment No. 1 to the Amended and Restated Supplemental
Retirement Plan -- incorporated by reference to Exhibit 10.5 (ii)
to Registrant's Form 10-Q for the quarter ended March 31, 1998.
*10.7 (i) 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.
*10.7 (ii) Amendment No. 1 to the Amended and Restated 1985 Deferred
Compensation Plan for Directors of Diebold, Incorporated --
incorporated by reference to Exhibit 10.7 (ii) to Registrant's Form
10-Q for the quarter ended March 31, 1998.
*10.8 (i) 1991 Equity and Performance Incentive Plan as Amended and Restated
-- incorporated by reference to Exhibit 10.8 to Registrant's Form
10-Q for the quarter ended March 31, 1997.
*10.8 (ii) Amendment No. 1 to the 1991 Equity and Performance Incentive Plan
as Amended and Restated -- incorporated by reference to Exhibit
10.8 (ii) to the Registrant's Form 10-Q for the quarter ended
September 30, 1998.
* Reflects management contract or other compensatory arrangement.
-13-
<PAGE> 14
DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 1O-Q
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K (continued)
*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 (i) 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.
*10.10 (ii) Amendment No. 1 to the Amended and Restated 1992 Deferred
Incentive Compensation Plan -- incorporated by reference to
Exhibit 10.10 (ii) to Registrant's Form 10-Q for the quarter
ended March 31, 1998.
*10.10 (iii) Amendment No. 2 to the Amended and Restated 1992 Deferred
Incentive Compensation Plan -- incorporated by reference to
Exhibit 10.10 (iii) to Registrant's Form 10-Q for the quarter
ended September 30, 1998.
*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.
*10.13 (i) Forms of Deferred Compensation Agreement and Amendment No. 1 to
Deferred Compensation Agreement -- incorporated by reference to
Exhibit 10.13 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996.
*10.13 (ii) Section 162(m) Deferred Compensation Agreement (as amended and
restated January 29, 1998) -- incorporated by reference to Exhibit
10.13 (ii) to Registrant's Form 10-Q for the quarter ended March
31, 1998.
*10.14 Deferral of Stock Option Gains Plan -- incorporated by reference
to Exhibit 10.14 of Registrant's Annual Report on Form 10-K for
the year ended December 31, 1998.
27. Financial Data Schedule.
* Reflects management contract or other compensatory arrangement.
(b) Reports on Form 8-K.
Registrant filed a Form 8-K on February 2, 1999 reporting the
adoption of a new Rights Agreement effective as of February 11,
1999.
-14-
<PAGE> 15
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: April 30, 1999 By: /s/ Robert W. Mahoney
--------------- ----------------------------------
Robert W. Mahoney
Chairman of the Board, President and
Chief Executive Officer
Date: April 30, 1999 By: /s/ Gerald F. Morris
--------------- ----------------------------------
Gerald F. Morris
Executive Vice President and
Chief Financial Officer
(Principal Accounting and
Financial Officer)
-15-
<PAGE> 16
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 3.2 to Registrant's Form 10-Q for the
quarter ended March 31, 1996. --
3.3 Certificate of Amendment to Amended Articles of Incorporation of
Diebold, Incorporated -- incorporated by reference to Exhibit 3.3
of Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998. --
4. Rights Agreement dated as of February 11, 1999 between
Diebold, Incorporated and The Bank of New York -- incorporated
by reference to Exhibit 4.1 to Registrant's Registration
Statement on Form 8-A dated February 11, 1999. --
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 Form 10-Q for the
quarter ended June 30, 1998. --
10.5 (i) 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. --
10.5 (ii) Amendment No. 1 to the Amended and Restated Supplemental
Retirement Plan -- incorporated by reference to Exhibit 10.5
(ii) to Registrant's Form 10-Q for the quarter ended March 31, 1998. --
10.7 (i) 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. --
</TABLE>
-16-
<PAGE> 17
DIEBOLD, INCORPORATED
FORM 10-Q
INDEX TO EXHIBITS (continued)
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<S> <C> <C>
10.7 (ii) Amendment No. 1 to the Amended and Restated 1985 Deferred
Compensation Plan for Directors of Diebold, Incorporated --
incorporated by reference to Exhibit 10.7 (ii) to Registrant's
Form 10-Q for the quarter ended March 31, 1998. --
10.8 (i) 1991 Equity and Performance Incentive Plan as Amended and
Restated -- incorporated by reference to Exhibit 10.8 to
Registrant's Form 10-Q for the quarter ended March 31, 1997. --
10.8 (ii) Amendment No. 1 to the 1991 Equity and Performance Incentive
Plan as Amended and Restated -- incorporated by reference to
Exhibit 10.8 (ii) to the Registrant's form 10-Q for the quarter
ended September 30, 1998. --
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 (i) 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. --
10.10 (ii) Amendment No. 1 to the Amended and Restated 1992 Deferred
Incentive Compensation Plan -- incorporated by reference to
Exhibit 10.10 (ii) to Registrant's Form 10-Q for the quarter
ended March 31, 1998. --
10.10 (iii) Amendment No. 2 to the Amended and Restated 1992 Deferred
Incentive Compensation Plan -- incorporated by reference to
exhibit 10.10 (iii) to the Registrant's Form 10-Q for the quarter
ended September 30, 1998. --
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. --
10.13 (i) Forms of Deferred Compensation Agreement and Amendment No.
1 to Deferred Compensation Agreement -- incorporated by
reference to Exhibit 10.13 to Registrant's Annual Report on
Form 10-K for the year
ended December 31, 1996. --
10.13 (ii) Section 162 (m) Deferred Compensation Agreement (as amended and
restated January 29, 1998) -- incorporated by reference to
Exhibit 10.13 (ii) to Registrant's Form 10-Q for the quarter
ended March 31, 1998. --
10.14 Deferral of Stock Option Gains Plan -- incorporated by
reference to Exhibit 10.14 of Registrant's Annual Report on
Form 10-K for the year ended December 31, 1998. --
27. Financial Data Schedule. 18
</TABLE>
-17-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED BALANCE SHEET AT MARCH 31, 1999 AND CONDENSED CONSOLIDATED
STATEMENTS OF INCOME FOR THE QUARTER ENDED MARCH 31, 1999 (UNAUDITED) AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 45,152
<SECURITIES> 36,017
<RECEIVABLES> 286,137
<ALLOWANCES> 0
<INVENTORY> 132,854
<CURRENT-ASSETS> 569,689
<PP&E> 281,644
<DEPRECIATION> 136,155
<TOTAL-ASSETS> 1,069,518
<CURRENT-LIABILITIES> 281,315
<BONDS> 20,800
0
0
<COMMON> 86,982
<OTHER-SE> 631,153
<TOTAL-LIABILITY-AND-EQUITY> 1,069,518
<SALES> 169,113
<TOTAL-REVENUES> 283,483
<CGS> 101,344
<TOTAL-COSTS> 182,395
<OTHER-EXPENSES> 59,408
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 45,864
<INCOME-TAX> 16,740
<INCOME-CONTINUING> 29,124
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,124
<EPS-PRIMARY> 0.42
<EPS-DILUTED> 0.42
</TABLE>
