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Update: Diebold reorganizes, O'Dell to oversee global operations

September 20, 2005

NORTH CANTON, Ohio - Walden W. O'Dell, Diebold Inc.'s chairman and chief executive, is expected to immediately assume the role of president and chief operating officer, according to a Sept. 21 news release issued by the company. Eric C. Evans, Diebold's outgoing president and COO, has already resigned from its Board of Directors.

O'Dell will now be responsible for Diebold's global operations.

The company also is expected to create a new financial self-service business unit - combining product and software development, manufacturing, procurement and marketing -that will act as a single global organization.

That new unit is to be headed by Thomas W. Swidarski, who is expected to be named its senior vice president. Global manufacturing and engineering functions now report to Swidarski.

"Our recent financial performance has been unacceptable, and these organizational changes are a major step toward improving our direction," O'Dell said. "Given the current challenging environment, I am assuming direct responsibility of the company's operations, and I am personally committed to taking immediate action to improve our performance."

"Our company has significant depth of leadership and this new organizational alignment allows us to take swift action that puts us on the right path," he added. "I wish to thank Eric Evans for his contributions to Diebold during his time here and wish him well in his future endeavors."

The new corporate structure is designed to better focus Diebold's resources on the dynamic challenges and needs of the global financial self-service marketplace.

Diebold reduces 3Q outlook

As a result of the company's lower-than-expected financial performance, third quarter and full-year earnings for 2005 have been adjusted.

Third-quarter earnings per share are expected to range from 32 cents to 37 cents, and EPS for the year is expected to range from $1.90 to $2. (Full-year earnings per share in 2004 were $2.53.)

Diebold officials said unrealized expected revenue growth in the North American financial self-service sector hit the company hard during 3Q. 

Total financial self-service revenue is expected to be more than $50 million lower during 3Q than previous expectations, with most of the shortfall occurring in North America.

"I am extremely disappointed with our lack of progress in correcting our operational inefficiencies, and I am personally committed to taking immediate action to improve our effectiveness in these areas," O'Dell said. "We are evaluating further restructuring and other actions to improve our performance and competitiveness beyond the current restructuring guidance."

As a result of the new organization, each product and service line within Diebold - financial self-service, security and election systems - is now a global business unit. Sales and service operations for both financial self-service and security will remain unchanged, continuing to operate as two organizations focused on the North American and international markets that report to O'Dell.

The global security unit, headed by Dennis Moriarty, will also report to O'Dell. Swidarski will retain responsibility for Diebold Election Systems (DES). However, day-to-day management of that unit will be handled by David Byrd, vice president of operations for DES.

About Swidarski

Prior to joining Diebold, Swidarski was a senior executive at PNC Bank and several other leading financial institutions. As president of DES, Swidarski has returned profitability to the subsidiary.

Read also: NCR, Diebold pursue other avenues in wake of dropping ATM profits.

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