With demand slowing for the automated teller machines that are its bread and butter, Diebold Inc. is considering selling its electronic voting terminals in the United States.
Diebold of Canton, Ohio, supplied voting terminals for last falls national election in Brazil. And Walden W. ODell, the companys chairman, chief executive officer, and president, said he has met with Katherine Harris, Floridas now-famous secretary of state, who wants to turn Florida into the showcase for voter machine technology.
The company is also talking to officials in other states about the technology.
The conversations have come as Diebold feels some financial stress. It recently said it would close a factory in Staunton, Va., and lay off 48 workers. It said the slowing economy and slackening demand for self-service banking machines prompted the decision.
Last week it reported that fourth-quarter revenues rose 35.8% from a year earlier, to $497 million, but net income dropped 1.7%, to $34.9 million.
In a conference call, Mr. ODell said the company is taking various cost-cutting steps.
However, he pointed to Diebolds installation of 300,000 voting terminals in Brazil which were used by more than 100 million voters in last falls election as a success story.
In 1999 Diebold acquired a Brazilian terminal maker, Procomp Amazonia Industria Electronica. Last January this division won a $105 million contract to outfit Brazil with voting terminals, the largest contract in Diebolds history.
The experience gave Diebold confidence that it could equip the United States in the same way, but the task would probably be much harder.
Mr. ODell said the U.S. electoral bureaucracy is vast and fragmented. Election boards in the nations 3,000 counties make many of the decisions, but the problems in Florida last November may prompt change, he said. Will there be significant change because of some of the national concerns today? he asked. We cant answer that.
Kartik Mehta, a research analyst at Midwest Research, said the fact that youd have to talk to so many different people is the main obstacle facing companies that want to break into such a diffuse market. Florida is trying to make it a state-level decision.
Mark S. Pritchett, executive director of the Florida governors select task force on election procedures, standards, and technology, said the state is examining installation of a more unified voting system that involves selecting comparable machines that will make it easier to perform recounts and define voter intent.
Diebold says it is taking a wait-and-see approach and maintaining dialogues with various election officials. Analysts covering the company say it is not counting any revenue for U.S. voting machines in its budget.
Its not something theyre relying on, Mr. Mehta said. When they bought Procomp, they were hoping maybe to get into other markets.
Jim Corridore, a technical industry analyst for Standard & Poors, said there will be a long, healthy, drawn-out process but not much revenue for Diebold this year from voting machines. Theyre hoping to see it as a future source of revenue growth.
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