Diebold, Incorporated reported first quarter 2004 net income of $29,169,000 on revenue of $498,255,000, with diluted earnings of $.40 per share, compared to $.36 in the first quarter of 2003. Diluted earnings per share were within the company’s previous guidance of $.38 to $.42. Revenue grew 21.5 percent versus the first quarter of 2003, while net income increased 12.6 percent and diluted earnings per share grew 11.1 percent. This performance was driven by strong growth in the financial self-service business, which more than off set the dilutive effect of the election systems business, which was $.04 per share in the first quarter of 2004 compared to $.01 accretive in the first quarter of 2003.
First Quarter Highlights
* Double-digit increase in product and service orders, excluding election systems.
* Revenue from non-election systems businesses grew by 19.9 percent, and 14.7 percent on a fixed exchange rate basis*, while diluted earnings per share from these businesses grew by 25.7 percent.
* Total financial self-service revenue grew by 22.2 percent and 15.1 percent on a fixed exchange rate basis*, led by strong demand for our Opteva financial self-service product solutions.
* Security solutions revenue grew 13.7 percent and 13.3 percent on a fixed exchange rate basis* as a result of continued market share gains, growth in the financial industry, government, and retail markets and two small security business acquisitions in Asia-Pacific.
* Total Asia-Pacific revenue increased 32.0 percent and 24.3 percent on a fixed exchange rate basis*.
* Total revenue for the Americas, excluding election systems, grew by 18.7 percent and 15.5 percent on a fixed exchange rate basis*.
*See accompanying notes for non-GAAP measures.
“We’re very pleased to have generated strong revenue growth in our financial self-service and security businesses, which performed exceptionally well during the first quarter” said Walden W. O’Dell, Diebold chairman and chief executive officer. “Market acceptance of Opteva is continuing to gain momentum globally, as the new product line continues to constitute a growing percentage of our overall financial self-service business. Our security solutions continue to gain momentum with double-digit revenue growth from the same period last year.
“Purchasing delays, as a result of ongoing political debate, are continuing to adversely impact the election systems business this year. As a result, we have significantly reduced election systems revenue and profit expectations for the current year. However, we remain confident in the long- term prospects of the election systems business. We’ve overcome these recent setbacks with our strong overall performance and have slightly increased full- year total revenue guidance for 2004.”
O’Dell continued, “As a result of the overall performance of the business and the continued acceptance of our core product and service solutions in the marketplace, I am very optimistic about our prospects for the balance of this year – and beyond.”
Fixed Exchange Rate First Quarter Orders
Total orders for product and service increased well into the double-digit range. Financial self-service orders in the Americas and Asia-Pacific increased in the double-digit range. Security orders remain strong, increasing in the double-digit range. Total orders in North America grew well into the double-digit range, excluding election systems. Orders in Europe, Middle East and Africa (EMEA) decreased in the single-digit range as this market remains very competitive.
Orders in election systems grew substantially from the first quarter 2003 and included a $35.8 million dollar order from Brazil.
Significant orders for the quarter included:
* Total Opteva orders in excess of $60 million
* An election systems order from the Tribunal Superior Eleitoral (TSE) of Brazil for $35.8 million
* Opteva orders from two major financial institutions in North America totaling $13.3 million
* Financial self-service orders from two banks in China and one bank in India totaling $6.8 million
* Four significant orders in Europe for financial self-service, including Opteva, totaling approximately $6.3 million
* A major Opteva order in Australia for $4.9 million
* Physical security orders from three banks in North America totaling $2.4 million
* Three orders for Opteva units in Latin America totaling $1.9 million
Total revenue for the quarter was $498.3 million, up $88.1 million, or 21.5 percent and 16.2 percent on a fixed exchange rate basis. Total financial self-service revenue increased 22.2 percent and 15.1 percent on a fixed exchange rate basis. Approximately $14 million of financial self-service revenue in the prior year period was reclassified from product to service to better reflect the nature of that business. Security solutions revenue grew 13.7 percent and 13.3 percent on a fixed exchange rate basis. Total financial self-service and security revenue increased by 19.9 percent and 14.7 percent on a fixed exchange rate basis.
Diebold, Incorporated is a global leader in providing integrated self- service delivery and security systems and services. Diebold employs more than 13,000 associates with representation in more than 88 countries worldwide and is headquartered in Canton, Ohio, USA. Diebold reported revenue of $2.11 billion in 2003 and is publicly traded on the New York Stock Exchange under the symbol “DBD.”
For complete details on Diebold’s first quarter performance visit CardData ([www.carddata.com]).