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Diebold's ATM sales fall in North America, jump in EMEA

July 24, 2006

NORTH CANTON, Ohio - Diebold Inc. released promising revenue for the first quarter of 2006, which reflects a 16.5 percent from the same quarter in 2005, but falling net income.

Revenue hit $623.7 million while net income came in at $12.7 million, 18 cents per share, down $15.2 million from 1Q '05, when earnings per share was 38 cents.

Diebold said in a news release that it plans to continue optimizing its manufacturing capacity throughout 2006, which includes restructuring its production operations. One initiative includes the fourth-quarter opening of a new manufacturing facility for financial self-service terminals (ATMs) and related components in Eastern Europe. Budapest, Hungary, has been identified as a likely location for this facility.

"As I reported last quarter, we have a number of key initiatives underway to return the company to long-term profitable growth," Diebold president and chief executive Thomas Swidarski said. "Realigning the company's manufacturing operations in Europe is necessary, given the tangible growth we're seeing in Central and Eastern Europe, as well as the prevailing market and competitive conditions in the financial self-service industry worldwide.

Swidarski said the plan allows Diebold to be closer to its supplier base in Central and Eastern Europe.

Diebold also announced that it plans to close its production facility in Cassis, France.

ATM revenue in 1Q '06 from Europe, the Middle East and Africa grew 50 percent, and revenue from Asia-Pacific was up 9.6 percent. ATM revenue in North America fell 6.8 percent from quarter to quarter.

Revenue for the financial self-service division was up 3.9 percent.

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