When Walden W. O'Dell took the helm of Diebold Inc. in November 1999, things were not going smoothly.
Diebold was still the nation's leading automated teller machine vendor, but problems that year and the preceding one - including difficulties with Y2K conversion, troubles in international expansion, and a wave of bank mergers that slowed ATM orders to a crawl - had shaken the company and lowered its stock price. Mr. O'Dell, Diebold's president, chief executive officer, and chairman, had made a name for himself as the president of Emerson Electric Co.'s Liebert Corp., which makes air-conditioning systems that protect high-tech equipment.
Under his leadership the Columbus, Ohio, company had gone from a domestic producer with revenues of $400 million to a $1.1 billion global supplier. Diebold executives were hoping he could make their company flourish too.
In a telephone interview last month, Mr. O'Dell said that Diebold has been gaining strength gradually but steadily.
"For me it's been a fabulous 21 months," he said. "People here before me had a view of where the company needed to go, which was global service and increased functionality."
Instead of trying to compete vigorously in the low end of the market - supplying cash dispensers and inexpensive ATMs to retail stores, for example - Diebold has redoubled its strengths in the high end by adding new features and more sophisticated technology to the machines it sells to banks. It has been enhancing a relatively new line of business, electronic voting machines.
And it has been working hard - with some notable success - to boost sales overseas, where most buyers are installing their first ATMs rather than upgrading to better ones.
"The U.S. is an upgrade-market economy, but a lot of the world is not, and there is a lot of untapped market," Mr. O'Dell said.
Last month the North Canton, Ohio, company announced its largest order from India, for 300 ATMs for UTI Bank. In March, Banco Nacional de Mexico, a Diebold customer since 1987, announced that it had purchased 500 machines. (This month Citigroup Inc. bought the bank's parent company, Grupo Financiero Banamex-Accival.)
Other noteworthy orders that Diebold listed in its second-quarter earnings announcement last month included a $5 million contract with a bank in China, a $20 million self-service contract with a national financial institution in Brazil, and ATM orders totaling more than $4 million for three financial institutions in the United Kingdom, France, and Poland.
Diebold's sales volume in the United States is still slightly heavier than its international volume. "There's still quite a bit of work to do to complete our global success story," Mr. O'Dell said. He said he is still dissatisfied with the company's low market share in the United Kingdom, Germany, and Hong Kong.
Domestically, business "isn't great, but it's not real bad, like it looked like it might be," Mr. O'Dell said. After looking pretty dire in November, December, and January, business has been improving each month since February, he said.
Demand for ATM hardware in the United States "remains quite flat," Mr. O'Dell said.
"The reason why things are good, given the weak economy, is all financial institutions see ATMs as a way to improve the bottom line," he said, "either through improved efficiencies or customer market share - because they can do their marketing through ATMs. So even in bad times there can be a good demand for what we do."
According to a March issue of The Nilson Report, Diebold shipped 4,048 ATMs in the United States last year, more than any other company. NCR Corp., its chief competitor, came in second, with 3,120. Diebold also shipped 9,586 cash dispensers in the United States to NCR's 7,280, but both companies were outpaced in that business by Tidel Technologies Inc. and Triton Systems.
Mr. O'Dell said Diebold is satisfied with its share of the hardware market for retail stores. The global market for high-end bank ATMs is about $6 billion, while the market for retail store machines is about $200 million, he said.
Also, companies that sell to small retailers often help the buyers finance the machines, which Mr. O'Dell said is not to his taste.
"We've seen a tremendous upheaval in the retail market" over the last year, he said. "We have nice offerings in the retail area, but we haven't been overly aggressive. We haven't made big loans, and we have tried to maintain our even composure in that area while others have been doing pretty exotic stuff."
Other companies "are willing to give product away or give millions of dollars of loans to high credit risk," he said. Diebold is not willing to do so, "which is why we have a small market share in that area."
Despite its conservative approach, Diebold, which has made ATM deals with Rite-Aid Corp. and McDonald's Corp. in the past few years, continues to have a presence in the retail market.
This month the company announced an agreement with Barnes & Noble College Bookstores Inc. to place ATMs at various U.S. college campuses. The first of these machines are currently being deployed at seven colleges, and 90 installations will follow in the fall. By yearend more than 100 colleges will have Diebold ATMs.
In June, Diebold signed a deal with Uni-Mart Inc. of State College, Pa., to install and operate 240 ATMs in Uni-Mart convenience stores and discount tobacco outlets in Pennsylvania, Delaware, Maryland, New York, and Virginia.
Diebold also holds a leading position in the area of enhanced technology - Internet connectivity, on-screen advertising, and voice recognition - Mr. O'Dell said.
Soon after he joined the company, the National Federation of the Blind brought a lawsuit against Diebold. The action prompted the company to try to work in partnership with the federation to develop a plan to make talking ATMs commercially available, he said.
Since then Diebold has manufactured voice-enabled ATMs for a number of major U.S. banking companies, including Bank of America Corp., Wells Fargo & Co., First Union Corp., U.S. Bancorp, and Bank One Corp.
"Our goal is anywhere-anytime accessibility for everyone," said Mr. O'Dell, who has two brothers who were blinded by glaucoma, as was his late father. "I'm a firm believer that technology should not shut people out, and if you don't have voice guidance in your offering you're shutting out a very important large group of people."
This spring Diebold and the federation began testing CashSource Plus 200, a text-to-speech technology for talking ATMs that will be commercially available this fall.
As with the current talking machines, visually impaired customers will plug headphones into the new ones to activate voice instructions. However, instead of using an actor's recorded voice, the new ATMs will use a computer-generated voice to convert instructions on the screen into speech.
Beyond the realm of automated teller machines, Diebold has also jump-started diversification "to make more substantial legs for Diebold to stand on," Mr. O'Dell said. After last November's tumultuous presidential election, Diebold decided to expand its presence in a market it entered in 1999, electronic voting machines.
In 1999 the company acquired a Brazilian voting terminal maker, Procomp Amazonia Industria Electronica. Last year Procomp won the largest contract in Diebold's history, a $105 million deal to outfit all of Brazil with electronic voting terminals.
"It's clear that we're trying to be a true global player with awesome service and inclusiveness in the technology area," Mr. O'Dell said.
Two months ago Diebold agreed to buy Global Election Systems Inc., which offers electronic machines to states and counties that want to upgrade from punch cards and other traditional voting methods.
This month Diebold lowered the price of the offer, to about $1.13 per Global Election Systems share. The deal, originally valued at $32 million to $38 million, is now valued at under $28.5 million and is expected to close next month.