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Diebold revenue down 6%, net income improves

April 27, 2010

Diebold Inc.'s reported revenue for the first quarter of 2010 was down 6 percent from the same period last year, but net income showed an improvement. Revenue for Q1 came in at $619 million, down from the $657 million the company reported for Q1 2009. But the company's net showed an improvement. Diebold reported a profit of $23.9 million, 36 cents a share, up from $1.6 million, 2 cents a share, a year ago, when the company took a $25 million reserve related to a settlement with the Securities and Exchange Commission.

A net debt decrease of more than $100 million contributed to the overall net gain.

"During the first quarter, we delivered solid results despite a challenging comparison to the same period last year, during which the effects of the global recession had yet to impact our results," said Thomas Swidarski, Diebold's president and CEO. "We exceeded our internal expectations during the quarter, as some business closed sooner than expected and we benefited from a more profitable segment mix. As a result, we have gained more confidence in our full-year outlook and are reaffirming our guidance for both earnings and revenue for 2010. Strategically, we will continue to focus on developing emerging solutions and building our infrastructure in key growth markets around the world. At the same time, the services-related business in our industry remains a key focus for us."

Swidarski says Diebold during Q1 continued to improve service profitability and is now on track to improve its service gross margin for the third consecutive year.

"We recognize that our defining competitive advantage lies in Diebold's unmatched ability to deliver the full range of service, support and software solutions that surround ATM-related technology, make it work reliably, at lower costs and with the flexibility to meet diverse customer demands," he said. "That's the driving force behind our service strategy emphasis — and it's our key to a successful future."

2010 total revenue is expected to rise between 4 percent and 9 percent.

While the company's services business remains strong, global product and services orders dropped 9 percent from 2009. Global financial self-service orders decreased 10 percent compared with growth in excess of 40 percent during Q4 2009. Orders in Asia-Pacific dropped 26 percent, compared with "a very strong" fourth quarter 2009, during which orders increased more than 50 percent, Diebold says.

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