STRATEGIC PARTNERS
July 20, 2000
DAYTON, Ohio -- NCR Corporation announced net income of $39 million, or 39 cents per diluted share, for the second quarter ended June 30, 2000. Excluding the impact of special items including charges related to the October 1999 restructuring and write-down of acquisition related in-process research and development, net income was $60 million, or 61 cents per diluted share, compared to $46 million or 45 cents per diluted share in the prior year period. Overall revenues were $1.45 billion compared to $1.57 billion in the year-ago period, a decline of 8 percent. Data Warehousing revenues led the way with a jump of 23 percent to $248 million, compared to $201 million in 1999's second quarter. Against a strong quarter a year ago, Financial Self Service (ATMs) revenues were down 7 percent and down 3 percent on a local currency basis. According to NCR, current customer demand for its Financial Self Service solutions is very good and it expects strong revenue growth in the second half of the year. Retail Store Automation declined 18 percent, primarily due to product supply issues. In 1998, NCR outsourced its production of retail POS terminals and scanners to Solectron Corporation. A lack of component availability negatively impacted Retail Store Automation revenues by approximately $50 million. According to the company, NCR and Solectron are working together to resolve this issue in the third quarter. Customer Services maintenance revenues were down 5 percent, primarily a function of revenue declines in de-emphasized businesses and the abrupt Y2K-related termination of commodity hardware maintenance revenues at the end of 1999. NCR Chairman and CEO Lars Nyberg said, "We are pleased with these results given the current environment in the technology services industry, but we clearly recognize our challenges and are aggressively addressing them." NCR reported operating income of $43 million for the second quarter of 2000. Excluding special items, NCR's operating income was $71 million in the current quarter compared to $61 million a year ago. NCR reported net income of $39 million for the second quarter of 2000. Excluding the $21 million after-tax impact of special items, NCR's net income was $60 million. Reported net income per basic and diluted share was 41 cents and 39 cents, respectively. Excluding special items, net income per diluted share was 61 cents, compared to 45 cents in the second quarter of 1999, a 36 percent increase. NCR ended the second quarter of 2000 with $561 million in cash and short-term investments. As of June 30, NCR had short and long-term debt of $75 million and total stockholder's equity of $1.7 billion. At the end of the second quarter, NCR employed approximately 32,500 people worldwide, including contractors, up 700 from 31,800 at the end of the first quarter, and down 1,000 from 33,500 a year ago. The increased number of employees in the second quarter over the first quarter is primarily due to business acquisitions. Looking ahead, according to NCR, the company expects to report the strongest second half of a year in terms of revenue growth and operating income since its December 1996 spin-off from AT&T.
