HUDSON,
Ohio, Oct. 20, 2022 /PRNewswire/ -- Diebold Nixdorf (NYSE: DBD), a world leader in
automating, digitizing and transforming the way people bank and
shop, today announced entry into a comprehensive agreement with key
financial stakeholders to support transactions that would refinance
certain debt with near-term maturities and provide the company with
$400 million in new capital. The
company also provided an update on its financial activities.
Debt Refinancing
We are pleased to announce that today we entered into a
Transaction Support Agreement (TSA) with the holders of over a
majority of our term loans and each series of our outstanding
secured and unsecured notes (or approximately 78.8% of the
aggregate principal amount of our existing term loans, about 59.3%
of the aggregate principal amount of our existing unsecured notes
due 2024, and approximately 89.7% of the aggregate principal amount
of our existing secured notes due 2025). The transactions
contemplated by the TSA are subject to customary closing conditions
and achieving certain participation thresholds as set forth
therein. Upon consummation of the transactions contemplated by the
TSA, we will have extended our near-term debt maturities and
obtained additional liquidity. It is our expectation that the
transactions contemplated by the TSA will be consummated prior to
Dec. 31, 2022.
The parties to the TSA have provided commitments subject to
satisfaction of the conditions specified therein, with respect to
the full $400 million in additional
financing contemplated by the TSA. However, the TSA provides that
holders of our existing term loans, existing unsecured notes due
2024 and/or our existing secured notes due 2025 who did not
initially sign the TSA but execute a joinder to the TSA by
Oct. 27, 2022, will have the
opportunity to elect to provide commitments with respect to up to a
specified share of such additional financing, replacing certain of
the existing commitments. In addition, only parties who execute a
joinder to the TSA by such date will be eligible to receive certain
transaction premiums that are described in the TSA.
Octavio Marquez, Diebold Nixdorf president and chief executive
officer, said: "We are grateful for the support we
received from our lenders and noteholders. We believe the very
rigorous and in-depth diligence process, and the support for the
TSA, demonstrate the financial community's confidence in our
long-term strategic model and the resilience of our business. Our
product and solution set is as robust as it has ever been, with
consistently strong customer demand. By year-end 2022, backlog is
expected to be at approximately $1.3
billion, which equates to securing approximately 80% of
full-year 2023 Product revenue. Additionally, of our $2.1 billion Services business, 70% of revenues
are recurring. This provides us with $1.4
billion in contract coverage of our full-year 2023 Services
revenue. Through the refinancing described in this agreement, we
will achieve enhanced financial flexibility, including the ability
to make strategic investments in the business."
Financial Information
Upon entering into the TSA with its lenders and bondholders,
Diebold Nixdorf today revised its
operating forecast for full-year (FY) 2022 and its strategic
operating model for FY2023 and FY2024, which is summarized
below.
Operating Forecast & Strategic
Operating Model
Financial
Metric
|
Prior
Guidance
FY2022
|
FY2022
Operating
Forecast
|
FY2023
Strategic Operating
Model
|
FY2024
Strategic Operating
Model
|
Total
Revenue
|
$3.55B -
$3.75B
|
~$3.50B
|
~$3.86B
|
~$3.97B
|
Adjusted EBITDA
(non-GAAP measure)1
|
$320M -
$350M
|
~$293M
|
~$470M
|
~$540M
|
Unlevered free cash
flow (non-GAAP measure)2
|
~$177M*
|
~($243)M**
|
~$291M
|
~$393M
|
*Prior guidance of
breakeven provided in Q2 2022 reflects the previously disclosed ~$0
of levered free cash flow, inclusive of ~$177M in cash interest
payments.
|
**Includes ~($62)M of
financing fees associated with the transactions contemplated by the
TSA.
|
_____________________________________
|
1 With
respect to the company's adjusted EBITDA outlook, it is not
providing a reconciliation to the most directly comparable GAAP
financial measures because it is unable to predict with reasonable
certainty those items that may affect such measures calculated and
presented in accordance with GAAP without unreasonable effort.
These measures primarily exclude future restructuring actions and
net non-routine items. These reconciling items are uncertain,
depend on various factors and could significantly impact, either
individually or in the aggregate, operating profit and net income
calculated and presented in accordance with GAAP.
|
2 Unlevered
free cash flow is a non-GAAP financial measure defined as net cash
provided by operating activities from continuing operations less
capital expenditures, less cash used for capitalized software
development, and excluding the impact of changes in cash of assets
held for sale and the use of cash for M&A and the legal
settlement for impaired cloud implementation costs, excluding the
use of cash for the settlement of foreign exchange derivative
instruments and excluding the use of cash for interest payments.
With respect to the company's non-GAAP unlevered free cash flow
outlook, it is not providing a reconciliation to the most directly
comparable GAAP financial measure because it is unable to predict
with reasonable certainty those items that may affect such measure
calculated and presented in accordance with GAAP without
unreasonable effort. This measure primarily excludes the future
impact of changes in cash of assets held for sale, cash used for
M&A activities and the settlement of foreign exchange
derivative instruments. These reconciling items are uncertain,
depend on various factors and could significantly impact, either
individually or in the aggregate, net cash provided (used) by
operating activities calculated and presented in accordance with
GAAP.
|
Additionally, the company is providing the following forecasted
number of revenue units by product by year:
Units
|
FY2022
|
FY2023
|
FY2024
|
ATMs
|
52,000
|
60,000
|
63,000
|
SCOs
|
25,000
|
35,000
|
40,000
|
ePOS
|
127,000
|
134,000
|
134,000
|
Demand for Diebold Nixdorf's
products and solutions remains strong. Given the company's elevated
backlog and where we are in the year, we expect to have 100%
coverage for forecast product revenue in 2022. Concurrently,
the FY2022 operating forecast reflects the effects of supply chain
challenges, which have led to deferred product revenue from FY2022
to FY2023 for approximately 2,500 ATMs, 2,000 self-checkout (SCO)
and 7,000 electronic point of sale (EPOS) units. Adjusted EBITDA
primarily reflects deferred revenue flow through. The updated
unlevered free cash flow forecast reflects the normalization of
working capital and certain cash costs related to the TSA
process.
While the macroeconomic environment has presented widely
discussed challenges in supply chain, the combination of strong
demand, industry-leading solutions, and ongoing mitigation and
improvements contribute to Diebold
Nixdorf's confidence in its strategic operating model. The
company remains focused on its customers as a global leader in
banking and retail technology, automation and related services.
Additional information on today's announcement, including a copy
of the TSA, the terms and conditions of the transactions
contemplated by the TSA and certain other information provided to
the lenders and noteholders in connection with the TSA can be found
in the current report on Form 8-K filed today with the SEC and
available on Diebold Nixdorf's
Investor Relations website.
Investor Relations
For any additional questions, please contact our Investor
Relations team until Friday, Oct. 21,
2022, when we will enter into a quiet period ahead of our Q3
2022 earnings in November. We will announce the date of our Q3
earnings call in the coming days.
About Diebold Nixdorf
Diebold Nixdorf, Incorporated
(NYSE: DBD) is a world leader in enabling connected commerce. We
automate, digitize and transform the way people bank and shop. As a
partner to the majority of the world's top 100 financial
institutions and top 25 global retailers, our integrated solutions
connect digital and physical channels conveniently, securely and
efficiently for millions of consumers each day. The company has a
presence in more than 100 countries with approximately 22,000
employees worldwide. Visit www.DieboldNixdorf.com for more
information.
Twitter: @DieboldNixdorf
LinkedIn: www.linkedin.com/company/diebold
Facebook: www.facebook.com/DieboldNixdorf
YouTube: www.youtube.com/dieboldnixdorf
Advisors
Evercore Group LLC is serving as financial advisor to
Diebold Nixdorf on the debt
refinancing, and Sullivan and Cromwell LLP is serving as legal
counsel to Diebold Nixdorf.
Certain of Diebold Nixdorf's
creditors holding existing term loans are being advised by PJT
Partners LP and Gibson, Dunn & Crutcher LLP. Certain of
Diebold Nixdorf's creditors holding
its senior notes due 2024, senior secured notes due 2025, existing
term loans and the senior secured notes due 2025 issued by its
wholly owned subsidiary, Diebold Nixdorf
Dutch Holding B.V are being advised by Houlihan Lokey
Capital, Inc. and Davis Polk &
Wardwell LLP. JPMorgan Chase Bank, N.A. ("JPMorgan") is the
administrative agent under the company's existing credit
facilities. JPMorgan has also been engaged to arrange on a
best-efforts basis a new asset-based revolving credit facility for
the company as well as a new term loan facility and new
superpriority term loan facility, in each case, as described in the
TSA.
Disclaimer
This press release does not constitute an offer to sell or buy,
nor the solicitation of an offer to sell or buy, any securities
referred to herein. Any solicitation or offer will only be made
pursuant to an offering memorandum and disclosure statement and
only to such persons and in such jurisdictions as is permitted
under applicable law.
Forward-Looking
Statements
This press release contains statements that are not
historical information and 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 include, but are not
limited to, projections, statements regarding the company's
expected future performance (including expected results of
operations and financial guidance), future financial condition,
potential impact of the ongoing coronavirus (COVID-19) pandemic,
anticipated operating results, strategy plans, future liquidity and
financial position.
Statements can generally be identified as forward looking
because they include words such as "believes," "anticipates,"
"expects," "intends," "plans," "will," "believes," "estimates,"
"potential," "target," "predict," "project," "seek," and variations
thereof or "could," "should" or words of similar meaning.
Statements that describe the company's future plans, objectives or
goals are also forward-looking statements, which reflect the
current views of the company with respect to future events and are
subject to assumptions, risks and uncertainties that could cause
actual results to differ materially. Although the company believes
that these forward-looking statements are based upon reasonable
assumptions regarding, among other things, the economy, its
knowledge of its business, and key performance indicators that
impact the company, 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.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof.
The factors that may affect the company's results include, among
others:
- the participation by company's lenders and noteholders in the
transactions contemplated by the TSA, the ability to negotiate and
execute definitive documentation with respect to the transactions
contemplated by the TSA, the receipt of required consents to any or
all of such transactions, satisfaction of any conditions in any
such documentation, the availability of alternative transactions,
the impact of publicity surrounding negotiations related to a
potential transaction;
- the overall impact of the global supply chain complexities on
the company and its business, including delays in sourcing key
components as well as longer transport times, especially for
container ships and U.S. trucking, given the company's reliance on
suppliers, subcontractors and availability of raw materials and
other components;
- the ultimate impact of the ongoing COVID-19 pandemic and other
public health emergencies, including further adverse effects to the
company's supply chain, maintenance of increased order backlog, and
the effects of any COVID-19 related cancellations;
- the company's ability to successfully meet its cost-reduction
goals and continue to achieve benefits from its cost-reduction
initiatives and other strategic initiatives, such as the current
$150m+ cost savings plan;
- the success of the company's new products, including its DN
Series line and EASY family of retail checkout solutions, and EV
charging service business;
- the impact of a cybersecurity breach or operational failure on
the company's business;
- the company's ability to generate sufficient cash to service
its debt or to comply with the covenants contained in the
agreements governing its debt and to successfully refinance its
debt;
- the company's ability to attract, retain and motivate key
employees;
- the company's reliance on suppliers, subcontractors and
availability of raw materials and other components;
- changes in the company's intention to further repatriate cash
and cash equivalents and short-term investments residing in
international tax jurisdictions, which could negatively impact
foreign and domestic taxes;
- the company's success in divesting, reorganizing or exiting
non-core and/or non-accretive businesses and its ability to
successfully manage acquisitions, divestitures, and alliances;
- the ultimate outcome of the appraisal proceedings initiated in
connection with the implementation of the Domination and Profit
Loss Transfer Agreement with the former Diebold Nixdorf AG (which
was dismissed in the company's favor at the lower court level in
May 2022) and the
merger/squeeze-out;
- the impact of market and economic conditions, including the
bankruptcies, restructuring or consolidations of financial
institutions, which could reduce the company's customer base and/or
adversely affect its customers' ability to make capital
expenditures, as well as adversely impact the availability and cost
of credit;
- the impact of competitive pressures, including pricing
pressures and technological developments;
- changes in political, economic or other factors such as
currency exchange rates, inflation rates (including the impact of
possible currency devaluations in countries experiencing high
inflation rates), recessionary or expansive trends, hostilities or
conflicts (including the conflict between Russia and Ukraine), disruption in energy supply, taxes
and regulations and laws affecting the worldwide business in each
of the company's operations;
- the company's ability to maintain effective internal
controls;
- unanticipated litigation, claims or assessments, as well as the
outcome/impact of any current/pending litigation, claims or
assessments;
- the effect of changes in law and regulations or the manner of
enforcement in the U.S. and internationally and the company's
ability to comply with government regulations.
- and other factors included in the company's filings with the
SEC, including its Annual Report on Form 10-K for the year ended
December 31, 2021, its Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2022, and in other documents the company
files with the SEC.
Except to the extent required by applicable law or regulation,
the company undertakes no obligation to update these
forward-looking statements to reflect future events or
circumstances or to reflect the occurrence of unanticipated
events.
You should consider these factors carefully in evaluating
forward-looking statements and are cautioned not to place undue
reliance on such statements.
DN-F
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