Diebold Nixdorf (DBD) Q4 2010 earnings summary

Executive summary

• FY2010 revenue rose 3.9% to $2.824B, but results swung to a $20.3M attributable net loss from $26.0M income, mainly due to a $168.7M non-cash EMEA goodwill impairment.

• Services contributed 52.9% of revenue; North American financial self-service orders improved, while Europe remained challenging.

Financial highlights

• Revenue was $2.824B, up 3.9% YoY; product sales rose 7.4% and service sales rose 0.9%.

• Gross profit increased 10.7% to $719.6M; gross margin expanded to 25.5% from 23.9%.

• Operating loss was $1.8M versus $150.6M operating profit in 2009; attributable net loss was $20.3M versus $26.0M net income.

• Q4 revenue was $791.0M versus $724.9M; continuing operations recorded a $118.7M loss versus $10.0M income, and attributable EPS was $(1.83) versus $0.02.

Outlook and guidance

• 2011 priorities: balance cost reductions with growth investment, with increased focus on software, services, security solutions and emerging markets.

• Expected 2011 pension contributions of $23.9M and postretirement benefit payments of $1.8M; statutory U.S. pension funding may rise beyond 2011.

• Management expected capital resources to cover planned working capital, R&D, capital investment, pension contributions, dividends and share repurchases for at least 12 months.