NORTH CANTON, Ohio Diebold reported a second quarter loss this morning of $98.6 million, amid a 5% decline in revenue and growing legal problems.
The ATM maker said it set aside $48 million for settlement of claims by the U.S. Justice Department and Securities and Exchange Commission under the Foreign Corrupt Practices Act for which the company accrued a $28 million expense in the second quarter; and another $17.5 million to settle a class action securities suit.
The second quarter loss compares to a net of $25.3 million for the same period last year. Second quarter revenue was $549.7 million, down from $559.3 million for the second quarter last year.
"Clearly, the results we announced today are not in line with our capabilities and potential as a company," said Andy Mattes, Diebold's new CEO, a former Hewlett-Packard and Siemens executive hired in June to lead the troubled ATM company. “As we develop our turnaround strategy in the coming months, we will maintain a balanced approach in cutting cost while at the same time laying the foundation for future growth. Getting cost out of the company will also improve our cash position and enable us to invest in growing the top line.”
Second quarter highlights included the full roll-out of the company’s concierge video services at Missoula FCU and Mountain America CU; an agreement to overhaul 1,100 ATMs at North Carolina SECU; a service contract with Arkansas FCU for 32 ATMs; a deal to upgrade ATMs at Michigan’s Vibe CU, formerly Telcom CU; and introduction of a pilot program to provide ATM access from smartphones.
For the first six months of the fiscal year Diebold reported a 1% decline in revenue to $1.05 billion, and a $112 million loss, compared to net income of $69.2 million last year.
