Diebold announces delay in 2007 annual-report filing

Diebold announces delay in 2007 annual-report filing

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Tags: Bank / Credit Union, Banking Executive Summary, Laws / Regulations, Manufacturers, North America, Other, Public Companies
3/4/08

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NORTH CANTON, Ohio — Diebold Inc. announced on Tuesday that it will not be able to meet the Securities and Exchange Commission's deadline for filing its 2007 annual report.

According to a statement released by Diebold, the report, as well as the company's quarterly reports for the second and third quarters of 2007, will be filed "as soon as possible." The company is consulting outside advisors and expects the review to be complete by the end of the second quarter of 2008.

On Feb. 6, Diebold said it planned to review the impact changes in revenue recognition methods for 2006 and 2007 would have on the company's overall revenue reporting. The company has been in continuous discussions with the Office of the Chief Accountant of the SEC with regard to its practice of recognizing certain revenue on a "bill and hold" basis in its North America business segment.

Diebold says it has discontinued use of its "bill and hold" method for revenue recognition and now only recognizes revenue after customer acceptance of products at a customer location. Within the North America business segment, when Diebold is contractually responsible for installation, customer acceptance will be upon completion of the installation of all items at a job site and Diebold's demonstration that the items are in operable condition. In instances when the company is not contractually responsible for the installation, the company will continue to recognize revenue upon shipment.

The corrected method of recognizing revenue will be adopted retroactively by restating previously issued financial statements. The calculation change comes after an in-depth analysis and review with Diebold's independent registered public accounting firm, KPMG LLP, Diebold says.

According to a news release, financial statements for fiscal years ended Dec. 31 of 2006, 2005, 2004 and 2003, quarterly data in each of the quarters for the years ended Dec. 31, 2006 and 2005 as well as the quarter ended March 31, 2007, should no longer be relied upon.

While the restated financial statements will address the issues identified in the review, the previously disclosed investigations by the SEC and U.S. Department of Justice remain ongoing.