NORTH CANTON, Ohio, March 3 /PRNewswire-FirstCall/ -- Diebold, Incorporated today announced that it will be unable to file its 2007 annual report on Form 10-K within the time period prescribed by the Securities and Exchange Commission (SEC). The 2007 annual report, as well as Diebold's quarterly reports on Form 10-Q for the periods ended June 30, 2007 and September 30, 2007, will be filed as soon as possible after completion of the previously disclosed review of accounting items by the company and its audit committee, in consultation with their outside advisors. The company currently anticipates this review will be completed by the end of the second quarter of 2008.
As announced on February 6, the company has concluded its review of the impact on revenue from its change in revenue recognition method for 2006 and 2007. Diebold has been in discussions with the Office of the Chief Accountant (OCA) of the SEC with regard to its practice of recognizing certain revenue on a "bill and hold" basis in its North America business segment. As a result of these discussions, the company determined that its previous, long- standing method of accounting for bill and hold transactions was in error and that it would discontinue the use of bill and hold as a method of revenue recognition in its North America and International businesses. For revenue previously recognized on a bill and hold basis, the company now recognizes revenue upon customer acceptance of products at a customer location. Within the North America business segment, when Diebold is contractually responsible for installation, customer acceptance will be upon completion of the installation of all of the items at a job site and Diebold's demonstration that the items are in operable condition. In those instances when the company is not contractually responsible for the installation, the company will continue to recognize revenue upon shipment of the products to a customer location.
Diebold's corrected method of recognizing revenue will be adopted retroactively by restating previously issued financial statements and comes after an in-depth analysis and review with its independent registered public accounting firm, KPMG LLP, the company's audit committee of its Board of Directors and the OCA of the SEC. As previously disclosed, the company's management has concluded that its financial statements for the fiscal years ended December 31, 2006, 2005, 2004 and 2003; the quarterly data in each of the quarters for the years ended December 31, 2006 and 2005; and the quarter ended March 31, 2007, should no longer be relied upon.
As soon as practical after the completion of the previously disclosed review of accounting items has been completed, but prior to filing its restated financial statements, Diebold will provide preliminary financial results for the second, third and fourth quarters of 2007. The company will then file the necessary restated financial statements as soon as practical, including its 2007 annual report on Form 10-K. While the restated financial statements will address the issues identified in the review, the previously disclosed investigations by the SEC and U.S. Department of Justice remain ongoing and there can be no assurance that the results of these investigations will not impact previously reported financial statements.
Forward-Looking Statements
In this press release, statements that are not reported financial results or other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements give current expectations or forecasts of future events and are not guarantees of future performance. These forward-looking statements relate to, among other things, the completion of the company's financial statements for the quarters ended June 30, 2007, September 30, 2007 and the year ended December 31, 2007, the completion of the company's restated financial statements, the ongoing SEC and Department of Justice investigations and the completion of the company's internal review. The use of the words "will," "believes," "anticipates," "expects," "intends" and similar expressions is intended to identify forward-looking statements that have been made and may in the future be made by or on behalf of the company.
Although the company believes that these forward-looking statements are based upon reasonable assumptions, these forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in or implied by the forward-looking statements. The company is not obligated to update forward-looking statements, whether as a result of new information, future events or otherwise.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Some of the risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements include, but are not limited to:
-- the finalization of the impact on the company's financial statements of its change in its revenue recognition practices for its North America business segment and any other business segment; -- the results of the SEC and Department of Justice investigations and the company's review; -- the completion of the company's financial statements for the quarters ended June 30, 2007, September 30, 2007 and the year ended December 31, 2007, and the completion of the restatement of the company's financial statements; -- costs and benefits associated with the company's workforce reductions, including any restructuring charges; -- the completion of the company's implementation of its ERP system and other IT-related functions; -- the company's ability to reduce costs and expenses and improve internal operating efficiencies, including the optimization of the company's manufacturing capacity; -- challenges raised about reliability and security of the company's election systems products, including the risk that such products will not be certified for use or will be decertified; -- changes in laws regarding the company's election systems products and services; -- potential security violations to the company's information technology systems; -- the company's ability to successfully execute its strategy related to the election systems business; and -- the company's ability to achieve benefits from its cost-reduction initiatives and other strategic changes. About Diebold
Diebold, Incorporated is a global leader in providing integrated self- service delivery and security systems and services. Diebold employs more than 17,000 associates with representation in nearly 90 countries worldwide and is headquartered in Canton, Ohio, USA. Diebold reported revenue of $2.9 billion in 2006 and is publicly traded on the New York Stock Exchange under the symbol 'DBD.' For more information, visit the company's Web site at http://www.diebold.com/.
