In the midst of disappointing preliminary results for Q4 and year-end 2012 — and flat projections for growth in 2013 — Diebold Inc. announced yesterday that president and CEO Thomas W. Swidarski would be stepping down from the company and its board of directors. Swidarski had held the CEO position since 2005.
"We wish to thank Tom for the leadership and integrity he provided during his 17-year career at Diebold — the past seven years as our chief executive," said executive chairman of the board, Henry D.G. Wallace. "This was a very difficult decision, and we wish Tom all the best in the next step in his career," said Wallace. "Progress has been made over the past several years in many areas. However, the board's judgment is that given the company's ongoing performance and pace with which it is delivering tangible value, it is in our stakeholders' best interests to make a change in leadership at this time."
Wallace said the board believed that the company had underperformed against opportunities in the marketplace and had failed to execute on its strategies.
The search for a new CEO is underway, the company said in a news release. Wallace will assume oversight of the company until Swidarski's replacement is hired.
Diebold also announced it had added the new executive position of chief operating officer, a role that will be filled by George S. Mayes Jr., who previously was executive vice president of global operations. Mayes, who joined the company in 2005, will report directly to Wallace.
Mayes' task as COO "will be to look at all aspects of the organization and identify areas that will help us accelerate the speed with which we reduce our cost structure and capitalize on changes in the marketplace," Wallace said. "His track record of delivering sound, fiscally responsible results in his career makes him ideally suited to lead our operations during this time of transition. This is a challenging opportunity, yet I am confident in our ability to begin the process of putting this great company back on a more positive trajectory."
Diebold will conduct its Q4 and year-end investor call on Feb 12 at 10:00 a.m. ET. In its preliminary announcement of results for these periods, the company said it expected a 2012 revenue increase of about 6 percent, in line with previous expectations. The company announced preliminary 2012 fourth quarter revenue of approximately $840 million and a loss from continuing operations of 12 cents per share.
The company blamed lower-than-expected earnings on major factors that included "an accelerated slowdown in the U.S. regional bank space and associated declines in non-contract-based service work, in addition to higher costs in the U.S. service business."
The company said in its preliminary report that it expected more of the same in 2013. "[the company] expects the U.S. regional bank space to be down substantially from 2012," the report said.
"In addition, the company expects improvements within its Brazil business with several significant tenders expected in the first half of 2013. However, limited visibility to the U.S. regional bank market and the final outcome of the large Brazilian orders creates a wide range of earnings expectations. As such, the company is cautious on its full year outlook for 2013."
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