Diebold Nixdorf ended 2017 with a $233.1 million loss as the company continued to integrate operations following the 2016 merger of the two automatic teller machine companies.
GREEN Diebold Nixdorf has accelerated cost-cutting efforts, but a slowed pace in ATM orders has cut into revenue growth.
Meanwhile the company continues its search for a new top executive following the December departure of Andy Mattas, who served as president and chief executive officer and worked out the 2016 merger of Diebold and Nixdorf to create the world's largest ATM company.
While ATM sales slowed, the company said it did see growth in its retail business and software and service revenue increased for both the ATM and retail segments.
Tuesday the company reported a loss of $233.1 million, or $3.09 per share, compared with a 2016 loss of $33 million, or 48 cents per share. Sales reached $4.61 billion, up compared with $3.32 billion the previous year. But there was a decline when comparing legacy Diebold and Nixdorf revenue from 2016, which topped $4.98 billion.
In the fourth quarter ended Dec. 31, Diebold Nixdorf posted a loss of $108.3 million, or $1.43 per share, compared with $77.8 million, or $1.04 per share, in the 2016 fourth quarter. Revenue totaled $1.25 billion compared with $1.24 billion the previous years. The loss included a one-time charge of approximately $95 million associated with the new U.S. tax law, the company reported.
The results come two months after the departure of Mattes. Since then, Christopher A. Chapman, chief financial officer, and Juergen Wunram, chief operating officer, have served as interim co-CEOs. Both answered questions for stock market analysts during a conference call after earnings were released.
The company's search for someone to replace Mattas is ongoing. Chapman told analysts he and Wunram have divided duties based on product segment and region. Chapman has a stronger familiarity with the North American market and ATM business, while Wunram is versed in production, the retail business and has stronger knowledge of the European markets.
"I think we are pretty well aligned," Wunram told analysts.
Chapman said he and Wunram had a close relationship before they were named co-CEOs and they have worked to make the transition seamless as the board searches for new leadership.
Diebold Nixdorf's board has hired a firm, Heidrick & Struggles, to assist with the search. According to an official statement, the company calls its search for a permanent CEO a top priority. "We cannot provide specifics or a timeline for a decision," the statement read, adding that board members are "evaluating candidates who have significant operating experience and track record in running a multi-national technology business."
As for the coming year, Diebold Nixdorf projects slow growth because ATM orders are behind in all regions. Chapman and Wunram indicated revenue in that segment would remain slow during the first part of the year, but could improve during the second half. Revenue is projected at between $4.5 billion and $4.7 billion, with a loss projected at $40 million to $65 million.
During 2017 Diebold Nixdorf cut costs by $100 million and Chapman said he believes the company can reduce costs by another $50 million this year. Savings was found by eliminating duplicate operations and cutting more than 1,000 jobs worldwide.
Chapman said fourth-quarter results were in line with the company's expectations and Diebold Nixdorf is "encouraged by the continued growth in services and software revenue," according to a press release. The company's hardware business continues to be under pressure in the banking market, according to the release.
"We followed through on our accelerated business improvement plans and, as a result, delivered adjusted profits at the high end of our previous guidance,” Chapman said in the release.
Wunram said in the release that the company is encouraged by the continued strength of its retail business based on the growth of revenue and orders. "The company is also experiencing solid demand for services and software, as we expand our leadership position in those areas," Wunram said in the release. "In addition, we are pleased with the pace of our integration efforts, which are enabling the company to streamline costs, increase productivity and strengthen our competitiveness.”
The stock market reacted by lowering the price on Diebold shares to less that $14 in early trading. The stock recovered and closed at $14.30, down 25 cents on the day. More than 4.67 million shares traded compares with a daily average of 1.43 million.
Reach Edd at 330-580-8484 or email@example.com
On Twitter: @epritchardREP