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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: July 16, 1997
NCR CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 001-00395 31-0387920
(STATE OR OTHER JURISDICTION OF (COMMISSION (I.R.S. EMPLOYER
INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
1700 S. PATTERSON BLVD., DAYTON, OH 45479
(937) 445-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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Item 5. Other Events
The Registrant's news release dated July 16, 1997, with respect to its
financial results for the quarter ended June 30, 1997, including condensed
consolidated balance sheets as of June 30, 1997, and condensed consolidated
statements of operations, consolidated revenue summary, and condensed
consolidated statements of cash flows for the three months and six months ended
June 30, 1997, is attached and incorporated herein by reference.
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.
NCR Corporation
Date: July 18, 1997 By: /s/ JOHN L. GIERING
--------------------------------------
John L. Giering, Senior Vice President
and Chief Financial Officer
NCR CORPORATION
INVESTOR RELATIONS DEPARTMENT
Tel: 937-445-5905
Fax: 937-445-5541
HTTP://WWW.NCR.COM
NEWS RELEASE
NCR REPORTS IMPROVED SECOND-QUARTER RESULTS
DAYTON, Ohio - NCR Corporation reported a narrowed second-quarter loss
of $4 million, or $.04 per share, compared to a loss of $18 million, or $.18 per
share, in the year-earlier period. Revenue in the quarter declined two percent
to $1.645 billion compared to $1.679 billion reported in the comparable period
last year. On a local currency basis, however, revenue increased one percent.
Gross margins declined in the quarter to 26.7 percent from 27.6 percent in the
year-ago period.
This quarter marked the sixth consecutive quarter of order increases on
a year-over-year basis. Despite continued strength in the U. S. dollar versus
major world currencies, total orders, on a reported basis, were up slightly. On
a local currency basis, orders posted a mid-single-digit gain compared to last
year's second quarter.
"We are pleased with our progress, but not with our pace," said Lars
Nyberg, NCR Chairman & CEO. "We have challenges in achieving our goals, but we
remain optimistic
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that we can show growth for the full-year in orders and
revenue in our core businesses; an improvement in operating income; and an
improvement in per-share results."
"Our retail and financial businesses reported sizable improvement, and
expenses remained under control during the quarter as we continued to make
investments in research and development and sales training. We are focused on
correcting the inefficiencies and leveraging the improvements," Nyberg said.
ORDERS
Total NCR orders were up slightly compared to last year's quarter, but
on a local currency basis, orders posted a mid-single-digit gain. On a product
basis, retail and financial systems posted order growth in the teens.
Entry-level servers and PCs also posted double-digit order growth. Professional
services posted a high-single-digit gain in orders. These gains were offset by
declines in orders for computer systems. On a geographic basis, low-single-digit
order gains were posted in the Americas and Europe/Middle East/Africa regions.
All three regions posted higher orders on a local currency basis than in the
comparable period last year.
REVENUE
Worldwide revenue was up one percent on a local currency basis, but was
down two percent on a reported dollar basis. On a reported basis, revenue gains
in retail products of 25 percent, financial products of 13 percent and
professional services of 9 percent over the year-ago period were more than
offset by revenue declines in computer systems, systemedia products and customer
services. Revenue increased in the Asia/Pacific region but declined in both the
Americas and Europe/Middle East Africa regions from the year-ago period.
GROSS MARGINS
Gross margins for NCR products and systems improved to 29.6 percent
compared to 29.2 percent in the second quarter last year. Services gross margins
declined by 2.6 percentage points because of lower reported revenues against a
cost structure developed to support higher revenue levels. The combined effect
was a 0.9 percent drop in overall gross margins compared to a year ago.
EXPENSES
Total expenses of $458 million were up modestly from the $453 million
in the comparable period last year. Selling, general and administrative expenses
increased due to
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additional investments in the sales force while research and development
expenses were flat at $96 million.
INCOME TAXES
Income tax expense in the quarter was $6 million compared to $22
million in the year-ago period. The reported tax rate in excess of the U. S.
statutory rate is a function of NCR's generating taxable international profits
and the inability to recognize tax benefits from domestic losses.
BALANCE SHEET
NCR ended the second quarter in a strong financial position with $1.156
billion in cash and short-term investments, debt of $92 million and total
shareholders' equity of $1.430 billion.
As of June 30, 1997, NCR employed 38,400 people worldwide, including
contractors.
NCR Corporation is a recognized world leader in data warehousing
solutions; open high availability transaction processing systems; automated
teller machines; scanners and point of sale terminals; service and support for
transaction-based systems for the retail, financial, communications and other
select markets.
###
NOTE TO INVESTORS:
This news release contains forward-looking statements, including statements as
to anticipated or expected results, beliefs, opinions and future financial
performance. These forward-looking statements are based on current expectations
and assumptions and involve risks and uncertainties that could cause NCR's
actual results to differ materially. -- In addition to the factors discussed in
this release, other risks and uncertainties include the timely development,
production or acquisition, and market acceptance of new and existing products
and services; shifts in market demands; continued competitive factors and
pricing pressures; short product-cycles and rapidly changing technologies;
turnover of sales force and the ability to attract and retained skilled
employees; tax rates; general economic and business conditions; and other
factors detailed from time to time in the company's Securities and Exchange
Commission reports, including the Form 10 filed in November 1996, the Form 10-K
for the year ended December 31, 1996, the Form 10-Q for the quarter ended March
31, 1997, and the company's annual report to stockholders for 1996.
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- --The company does not undertake any obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
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NCR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
For the Periods Ended June 30
-----------------------------
Three Months Six Months
------------ ----------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES
Sales $ 919 $ 937 $ 1,633 $ 1,812
Services 726 742 1,401 1,453
------- ------- ------- -------
TOTAL REVENUES 1,645 1,679 3,034 3,265
Cost of sales 647 663 1,136 1,300
Cost of services 559 552 1,076 1,096
------- ------- ------- -------
GROSS MARGIN 439 464 822 869
------- ------- ------- -------
% of Revenue 26.7% 27.6% 27.1% 26.6%
Selling, general, and administrative expenses 362 356 676 711
% of Revenue 22.0% 21.2% 22.3% 21.8%
Research and development expenses 96 97 183 184
% of Revenue 5.8% 5.8% 6.0% 5.6%
------- ------- ------- -------
INCOME (LOSS) FROM OPERATIONS (19) 11 (37) (26)
------- ------- ------- -------
% of Revenue -1.2% 0.7% -1.2% -0.8%
Interest expense 4 13 6 26
Other (income) expense, net (25) (6) (30) (3)
------- ------- ------- -------
INCOME (LOSS) BEFORE INCOME TAXES 2 4 (13) (49)
------- ------- ------- -------
% of Revenue 0.1% 0.2% -0.4% -1.5%
Income tax expense 6 22 7 34
------- ------- ------- -------
NET LOSS $ (4) $ (18) $ (20) $ (83)
======= ======= ======= =======
% of Revenue -0.2% -1.1% -0.7% -2.5%
NET LOSS PER COMMON SHARE $ (0.04) $ (0.18) $ (0.20) $ (0.82)
======= ======= ======= =======
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING (IN MILLIONS) 102.1 101.4 101.8 101.4
======= ======= ======= =======
</TABLE>
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NCR CORPORATION
CONSOLIDATED REVENUE SUMMARY
(Unaudited)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
For the Periods Ended June 30
-----------------------------
Three Months Six Months
------------ ----------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Retail Products $ 134 $ 107 $ 214 $ 195
Financial Products 278 246 449 441
Computer Products 259 318 504 602
PCs/Entry Level Server Products 114 112 199 271
Systemedia 129 142 248 272
Customer Support Services 531 550 1,030 1,084
Professional Services 164 150 305 284
Data Services 27 30 56 64
Other 9 24 29 52
--------- --------- -------- ---------
Total Revenues $ 1,645 $ 1,679 $ 3,034 $ 3,265
========= ========= ======== =========
</TABLE>
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NCR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
June 30 March 31 December 31
1997 1997 1996
---- ---- ----
(Unaudited) (Unaudited)
<S> <C> <C> <C>
ASSETS
Current assets
Cash and short-term investments $1,156 $1,133 $1,203
Accounts receivable, net 1,446 1,336 1,457
Inventories 517 535 439
Other current assets 244 257 219
------ ------ ------
TOTAL CURRENT ASSETS 3,363 3,261 3,318
Property, plant, and equipment, net 1,146 1,143 1,207
Other assets 776 763 755
------ ------ ------
TOTAL ASSETS $5,285 $5,167 $5,280
====== ====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings $ 56 $ 44 $ 28
Accounts payable 303 314 352
Other current liabilities 1,581 1,584 1,587
------ ------ ------
TOTAL CURRENT LIABILITIES 1,940 1,942 1,967
Long-term debt 36 44 48
Other long-term liabilities 1,879 1,860 1,869
------ ------ ------
TOTAL LIABILITIES 3,855 3,846 3,884
TOTAL SHAREHOLDERS' EQUITY 1,430 1,321 1,396
------ ------ ------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,285 $5,167 $5,280
====== ====== ======
</TABLE>
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NCR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
For the Periods Ended June 30
-----------------------------
Three Months Six Months
------------ ----------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net Loss $ (4) $ (18) $ (20) $ (83)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization 94 103 186 175
Changes in operating assets and liabilities
Receivables (110) 208 11 733
Inventories 18 (5) (78) 61
Other 78 (237) (25) (537)
----- ----- ------- -----
NET CASH PROVIDED BY OPERATING ACTIVITIES 76 51 74 349
INVESTING ACTIVITIES
Short-term investments, net (40) (9) (277) (17)
Expenditures for service parts & property,
plant, and equipment (101) (194) (149) (231)
Other investing activities 9 25 15 18
----- ----- ------- -----
NET CASH USED IN INVESTING ACTIVITIES (132) (178) (411) (230)
FINANCING ACTIVITIES
Short-term borrowings, net 12 12 28 (6)
Long-term debt, net (8) (1) (12) (231)
Transfers from AT&T, net -- 286 -- 595
Other financing activities 18 -- 18 --
----- ----- ------- -----
NET CASH PROVIDED BY FINANCING ACTIVITIES 22 297 34 358
Effect of exchange rate changes on cash
and cash equivalents 17 9 (21) (7)
----- ----- ------- -----
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (17) 179 (324) 470
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 856 605 1,163 314
----- ----- ------- -----
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 839 $ 784 $ 839 $ 784
===== ===== ======= =====
</TABLE>
