NORTH CANTON, Ohio - Diebold Inc. reported first quarter revenue of $628.4 million, up less than 1 percent (.8 percent) from 1Q 2006. But the company reported a net loss for the quarter of $5.9 million or 9 cents per share, a drop from the net income of $12.7 million, 18 cents per share, it reported last year.
Diebold said restructuring costs associated with the closing of its manufacturing facility in Cassis, France, played a role.
"We expected the first half of this year to be challenging," said Thomas W. Swidarski, Diebold's president and chief executive. "In financial self-service, we saw revenue growth in all our geographic regions, as the market remains healthy and we were able to close some business earlier than anticipated. While we anticipate the second quarter will be equally challenging, I believe our renewed focus on the customer and the operational improvements we've made position us well for the second half of the year."
Fueling second-quarter growth, Swidarski said, is Diebold's strengthened manufacturing position in Europe, the Middle East and Africa since the closing of the Cassis facility.
The production facility in Cassis closed at the end of the first quarter, and in March 2007 Diebold finalized an agreement with the remaining union that was challenging the closure of the facility.
All unions have agreed to the related social plan, Diebold said. All usable inventories and production equipment have been transferred to other locations.
The company expects to sell the building during the second quarter.
Diebold continued to ramp up production at its new manufacturing facility in Budapest, Hungary, producing approximately 1,700 Opteva ATMs, putting it on target to produce approximately 10,000 ATMs in Hungary in 2007.
Hungary is now Diebold's primary ATM source in the EMEA market.
The long-term outlook for the company's election-systems business is still up in the air.
"We are working diligently on this effort and we will communicate our strategy as soon as possible," Swidarski said.
From a financial self-service perspective, orders overall were down, but the segment, when coupled with services, showed revenue growth. The loss of one Canadian customer adversely affected orders, Diebold said.
