Zulassungsfolgepflichten: Diebold Nixdorf, Incorporated: Release according to Article 50 of the WpHG [the German Securities Trading Act] with the objective of Europe-wide distribution

 

 

 

 

 

 

1. Reconciliation of GAAP net income (loss) to EBITDA and Adjusted EBITDA measures (Dollars in millions):

	Q2 2020				Q2 2019				YTD 6/30/2020				YTD 6/30/2019				TTM 6/30/2020
Net loss	$	(23.1)			$	(55.3)			$	(116.5)			$	(187.2)			$	(273.9)
Income tax expense (benefit)	(3.4)				9.2				16.6				69.6				63.7
Interest income	(2.4)				(2.2)				(3.5)				(5.1)				(7.7)
Interest expense	48.3				49.9				96.3				100.8				198.4
Depreciation and amortization	45.8				52.4				95.1				105.7				193.6
EBITDA	65.2				54.0				88.0				83.8				174.1
Share-based compensation	3.6				4.8				7.6				14.1				17.5
Foreign exchange (gain) loss, net	7.6				5.1				7.2				2.3				10.0
Miscellaneous, net	(6.5)				0.4				(5.6)				1.8				(3.8)
Equity in earnings of unconsolidated subsidiaries	-				0.2				-				0.6				(1.6)
Restructuring and DN Now transformation expenses	23.0				28.4				59.2				43.6				128.5
Non-routine expenses, net	29.5				13.9				55.5				25.7				116.3
Adjusted EBITDA	$	122.4			$	106.8			$	211.9			$	171.9			$	441.0
Adjusted EBITDA % revenue	13.7		%		9.3		%		11.8		%		7.9		%		10.9		%

We define EBITDA as net loss excluding income tax benefit, net interest, and depreciation and amortization expense. As defined in the company's credit agreement, Adjusted EBITDA is EBITDA before the effect of the following items: share-based compensation, foreign exchange loss net, miscellaneous net, equity in earnings of unconsolidated subsidiaries, restructuring expenses and non-routine expenses net, as outlined in Note 1 of the non-GAAP measures. In order to remain comparable to the U.S. GAAP depreciation and amortization measures, the Company excluded the amortization of purchase accounting adjustments from non-routine expenses, net in the Adjusted EBITDA reconciliation of $21.4 and $24.4 for the three months ended June 30, 2020 and 2019, respectively, and $42.8 and $49.0 for the six months ended June 30, 2020 and 2019, respectively. Additionally, $3.8 and $9.2 of accelerated depreciation expense for the three and six months ended June 30, 2020 was excluded from Restructuring and DN Now transformation expenses. Deferred financing fees amortization is included in interest expense and GAAP depreciation and amortization; as a result, the Company excluded from the depreciation and amortization caption $7.2 and $5.0 for the three months ended June 30, 2020 and 2019, respectively, and $11.4 and $10.1 for the six months ended June 30, 2020 and 2019. Miscellaneous, net primarily consists of gain recognized on the surrender of company-owned life insurance contracts. These are non-GAAP financial measurements used by management to enhance the understanding of our operating results. EBITDA and Adjusted EBITDA are key measures we use to evaluate our operational performance. We provide EBITDA and Adjusted EBITDA because we believe that investors and securities analysts will find EBITDA and Adjusted EBITDA to be useful measures for evaluating our operating performance and comparing our operating performance with that of similar companies that have different capital structures and for evaluating our ability to meet our future debt service, capital expenditures, and working capital requirements. However, EBITDA and Adjusted EBITDA should not be considered as alternatives to net income as a measure of operating results or as alternatives to cash flows from operating activities as a measure of liquidity in accordance with GAAP.  

 

1. Reconciliation of diluted GAAP EPS to non-GAAP EPS:

	Q2 2020				Q2 2019				YTD 6/30/2020				YTD 6/30/2019
Total diluted EPS attributable to Diebold Nixdorf, Incorporated (GAAP measure)	$	(0.31)			$	(0.66)			$	(1.51)			$	(2.39)
Restructuring and DN Now transformation expenses	0.34				0.37				0.87				0.57
Non-routine income/expense:
Legal/deal expense	0.04				0.05				0.07				0.17
Acquisition integration	-				0.02				-				0.02
Wincor Nixdorf purchase accounting adjustments	0.27				0.32				0.55				0.64
Costs related to previously divested business in Germany	-				-				0.06				-
Divestitures and fixed asset sales	0.19				0.14				0.16				0.19
Loss making contract related to discontinued offering	0.17				-				0.33				-
Inventory charge/gain	(0.02)				(0.06)				0.03				(0.11)
Other	(0.10)				0.03				(0.01)				0.06
Total non-routine (income)/expense	0.55				0.50				1.19				0.97
Tax impact (inclusive of allocation of discrete tax items)	(0.20)				(0.15)				(0.49)				0.29
Total adjusted EPS (non-GAAP measure)	$	0.38			$	0.06			$	0.06			$	(0.56)

Restructuring and DN Now transformation expenses relate to the business transformation plan focused on driving connected commerce, finance, sales and operational excellence, business integration and global workforce alignment, including GAAP restructuring costs, as well as the third-party costs of the DN Now transformation program. Legal and deal expenses primarily related to third-party expenses and fees paid by the company for the ongoing obligations related to prior regulatory settlements, including the cost of acquisition and real estate tax in connection with the squeeze-out proceedings and related expenses during 2019. The Wincor Nixdorf purchase accounting adjustments relate to the valuation of intangible asset charges as management believes that this is useful information to investors by highlighting the impact of the acquisition of Wincor Nixdorf on the company's operations. The Germany costs relate to a previously divested business. The divestitures and fixed asset sales relates to the divestitures and liquidation of Eurasia non-core businesses in both 2020 and 2019 as well as the Venezuela business in 2019. The loss making contracts represent charges incurred for expected losses through the contractual service period. The inventory charge/gain relates to the company's re-assessment of primarily finished goods and service parts due to contract cancellations and excess and obsolete inventory as a result of streamlining the company's product portfolio and optimizing its manufacturing footprint. Other includes incremental payments to essential service technicians for their contributions during the COVID-19 pandemic and certain IT projects, as well as executive severance, and certain non-cash balance sheet adjustments in Brazil, Hong Kong and Canada. Additionally, Other includes gain on surrender of certain Company-owned life insurance policies.  

 

1. Free cash flow (use) is calculated as follows (Dollars in millions):

	Q2 2020				Q2 2019				YTD 6/30/2020				YTD 6/30/2019				TTM 6/30/2020
Net cash provided (used) by operating activities (GAAP measure)	$	(90.8)			$	(10.5)			$	(170.6)			$	(67.6)			$	32.8
Excluding the impact of changes in cash of assets held for sale	2.1				-				22.3				-				22.3
Excluding the use of cash for the settlement of certain derivative instruments	18.8				-				18.8				-				18.8
Capital expenditures	(3.4)				(5.6)				(8.8)				(20.3)				(31.4)
Free cash flow/(use) (non-GAAP measure)	$	(73.3)			$	(16.1)			$	(138.3)			$	(87.9)			$	42.5

We define free cash flow (use) as net cash provided (used) by operating activities (excluding assets held for sale) less cash used for the settlement of certain derivative instruments and capital expenditures. We consider free cash flow (use) to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the purchase of property and equipment, can be used for debt servicing, strategic opportunities, including investing in the business, making strategic acquisitions, strengthening the balance sheet and paying dividends.