Separation Into Two Leading Public Companies
On Track
NCR Corporation (NYSE: NCR) reported financial results today for
the three months ended March 31, 2023. First quarter results and
other recent highlights include:
- Revenue of $1.9 billion, up 1%; up 4% on a constant currency
basis
- Recurring revenue of $1.2 billion, up 4% and up 7% on a
constant currency basis
- Net income from continuing operations attributable to NCR of
$9 million, up 127%
- Adjusted EBITDA of $302 million, up 11% and up 19% on a
constant currency basis
- GAAP diluted EPS from continuing operations of $0.04, up
115%
- Non-GAAP diluted EPS of $0.56, up 6%
- Net cash provided by operating activities of $317 million;
Free cash flow of $209 million
- Company progressing toward separation into two public
companies
“Our first quarter results represent a good start to the year as
we delivered strong recurring revenue growth, margin expansion and
increased cash flow generation,” said Michael Hayford, Chief
Executive Officer. “We have positive momentum heading toward the
separation into two public companies. During the past two quarters,
NCR generated over $400 million in combined free cash flow,
allowing us to reduce financial leverage in anticipation of the
separation transaction.”
Mr. Hayford continued, “Following the planned fourth quarter
separation, we will become two strong, standalone companies with
long runways for growth. We believe each company will benefit from
increased operating and financial flexibility and will unlock
significant value for our customers and stockholders.”
In this release, we use certain non-GAAP measures, including
presenting certain measures on a constant currency basis. These
non-GAAP measures include “free cash flow,” “Adjusted EBITDA,” and
others with the words “non-GAAP” or "constant currency" in their
titles. These non-GAAP measures are listed, described and
reconciled to their most directly comparable GAAP measures under
the heading “Non-GAAP Financial Measures” later in this
release.
First Quarter 2023
Operating Results
Revenue
First quarter revenue of $1,891 million increased 1% year over
year. On a constant currency basis, revenue was up 4% year over
year. The following table shows revenue for the first quarter:
$ in millions
Q1 2023
Q1 2022
% Increase (Decrease)
% Increase (Decrease)
Constant Currency
Retail
$
552
$
546
1
%
4
%
Hospitality
223
211
6
%
7
%
Digital Banking
136
136
—
%
—
%
Payments & Network
323
299
8
%
11
%
Self-Service Banking
613
611
—
%
4
%
Other
54
68
(21
)%
(18
)%
Eliminations (1)
(10
)
(8
)
25
%
25
%
Total segment revenue
$
1,891
$
1,863
2
%
4
%
Other adjustment (2)
—
3
Total revenue
$
1,891
$
1,866
1
%
4
%
Recurring revenue
$
1,229
$
1,179
4
%
7
%
Recurring revenue %
65
%
63
%
(1)
Eliminations include revenues from
contracts with customers and the related costs that are reported in
the Payments & Network segment as well as in the Retail or
Hospitality segments, including merchant acquiring services that
are monetized via payments.
(2)
Other adjustment reflects the revenue
attributable to the Company's operations in Russia for the three
months ending March 31, 2022 that were excluded from management's
measure of revenue due to our previous announcement to suspend
sales to Russia and orderly wind down of our operations in Russia
beginning in the first quarter of 2022. Refer to section entitled
"Non-GAAP Financial Measures" for additional information.
- First quarter gross margin of $466 million increased from $411
million in the prior year period. Gross margin rate was 24.6%,
compared to 22.0% in the prior period. First quarter gross margin
(non-GAAP) of $496 million increased from $453 million in the prior
year period. Gross margin rate (non-GAAP) was 26.2%, compared to
24.3% in the prior period.
- First quarter income from operations of $110 million increased
from $33 million in the prior year period. First quarter operating
income (non-GAAP) of $206 million increased from $158 million in
the prior year period.
- First quarter net income from continuing operations
attributable to NCR of $9 million increased from net loss from
continuing operations attributable to NCR of $33 million in the
prior year period.
- First quarter Adjusted EBITDA of $302 million increased from
$271 million in the prior year period. Foreign currency
fluctuations had an unfavorable impact on the Adjusted EBITDA
comparison of 8%. Adjusted EBITDA margin rate was 16.0%, compared
to 14.5% in the prior year period.
- First quarter cash provided by operating activities of $317
million increased from cash provided by operating activities of $38
million in the prior year period. First quarter free cash flow was
$209 million, compared to free cash outflow of $10 million in the
prior year period.
2023
Outlook
We are affirming our full year 2023 guidance communicated on
February 7, 2023. For the full year 2023, we are forecasting:
- Revenue - $7.8 billion to $8.0 billion
- Adjusted EBITDA - $1.45 billion to $1.55 billion
- Non-GAAP diluted EPS - $3.30 - $3.50
- Free cash flow - $400 million to $500 million
For the second quarter of 2023, we are forecasting:
- Revenue - $1.9 billion to $2.0 billion
- Adjusted EBITDA - $340 million to $360 million
- Non-GAAP diluted EPS - $0.70 - $0.76
- Free cash flow - approximately $50 million
With respect to our Adjusted EBITDA, Free Cash Flow and non-GAAP
diluted earnings per share guidance, we do not provide a
reconciliation of the respective GAAP measures because we are not
able to predict with reasonable certainty the reconciling items
that may affect the GAAP net income from continuing operations,
GAAP cash flow from operating activities and GAAP diluted earnings
per share from continuing operations without unreasonable effort.
The reconciling items are primarily the future impact of special
tax items, capital structure transactions, restructuring, pension
mark-to-market transactions, acquisitions or divestitures, or other
events. These reconciling items are uncertain, depend on various
factors and could significantly impact, either individually or in
the aggregate, the GAAP measures. Refer to the heading “Non-GAAP
Financial Measures” for additional information regarding our use of
non-GAAP financial measures.
Separation
Update
On September 15, 2022, NCR announced a plan to separate into two
independent, publicly traded companies – one focused on digital
commerce, the other on ATMs. The separation is intended to be
structured in a tax-free manner. The separation transaction will
follow the satisfaction of customary conditions, including
effectiveness of appropriate filings with the U.S. Securities and
Exchange Commission, and the completion of audited financial
statements. The current target is to complete the separation in the
fourth quarter of 2023.
Should alternative options become available in the future that
could deliver superior value to our shareholders than the planned
separation, such as a whole or partial company sale of NCR, the
Board remains open to considering alternative scenarios.
2023 First Quarter
Earnings Conference Call
A conference call is scheduled for today at 4:30 p.m. Eastern
Time to discuss the first quarter 2023 results. Access to the
conference call and accompanying slides, as well as a replay of the
call, are available on NCR's web site at http://investor.ncr.com.
Additionally, the live call can be accessed by dialing 888-820-9413
(United States/Canada Toll-free) or 786-460-7169 (International
Toll) and entering the participant passcode 8001995.
More information on NCR’s first quarter earnings, including
additional financial information and analysis, is available on
NCR’s Investor Relations website at http://investor.ncr.com/.
About NCR Corporation
NCR Corporation (NYSE: NCR) is a leader in transforming,
connecting and running technology platforms for self-directed
banking, stores and restaurants. NCR is headquartered in Atlanta,
Georgia, with 35,000 employees globally. NCR is a trademark of NCR
Corporation in the United States and other countries.
Website: www.ncr.com Twitter: @NCRCorporation Facebook:
www.facebook.com/ncrcorp LinkedIn:
https://www.linkedin.com/company/ncr-corporation YouTube:
www.youtube.com/user/ncrcorporation
Cautionary Statements
This release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the “Act”). Forward-looking
statements use words such as “expect,” “anticipate,” “outlook,”
“intend,” “plan,” “confident,” “believe,” “will,” “should,”
“would,” “potential,” “positioning,” “proposed,” “planned,”
“objective,” “likely,” “could,” “may,” and words of similar
meaning, as well as other words or expressions referencing future
events, conditions or circumstances. We intend these
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Act.
Statements that describe or relate to NCR’s plans, goals,
intentions, strategies, or financial outlook, and statements that
do not relate to historical or current fact, are examples of
forward-looking statements. Examples of forward-looking statements
in this release include, without limitation, statements regarding:
our expectations of demand for our solutions and execution, and the
impact thereof on our financial results in 2023; NCR’s focus on
advancing our strategic growth initiatives and transforming NCR
into a software-led as-a-service company with a higher mix of
recurring revenue streams; our expectations of NCR's ability to
deliver increased value to customers and stockholders; statements
regarding the planned separation of NCR into two separate
companies, including, but not limited to, statements regarding the
anticipated timing and structure of such planned transaction, the
future commercial or financial performance of the commerce company
or the ATM company following such planned transaction, value
creation and ability to innovate and drive growth generally as a
result of such transaction, and the expected capital structure, net
debt and pension obligations of the companies at the time of and
following the transaction. Forward-looking statements are based on
our current beliefs, expectations and assumptions, which may not
prove to be accurate, and involve a number of known and unknown
risks and uncertainties, many of which are out of NCR’s control.
Forward-looking statements are not guarantees of future
performance, and there are a number of important factors that could
cause actual outcomes and results to differ materially from the
results contemplated by such forward-looking statements, including
those factors relating to:
- Strategy and Technology: transforming our business model;
development and introduction of new solutions; competition in the
technology industry; integration of acquisitions and management of
alliance activities; our multinational operations;
- Business Operations: domestic and global economic and credit
conditions; risks and uncertainties from the payments-related
business and industry; disruptions in our data center hosting and
public cloud facilities; retention and attraction of key employees;
defects, errors, installation difficulties or development delays;
failure of third-party suppliers; a major natural disaster or
catastrophic event, including the impact of the coronavirus
(COVID-19) pandemic and geopolitical and macroeconomic challenges;
environmental exposures from historical and ongoing manufacturing
activities; and climate change;
- Data Privacy & Security: impact of data protection,
cybersecurity and data privacy including any related issues,
including the April 2023 ransomware incident;
- Finance and Accounting: our level of indebtedness; the terms
governing our indebtedness; incurrence of additional debt or
similar liabilities or obligations; access or renewal of financing
sources; our cash flow sufficiency to service our indebtedness;
interest rate risks; the terms governing our trade receivables
facility; the impact of certain changes in control relating to
acceleration of our indebtedness, our obligations under other
financing arrangements, or required repurchase of our senior
unsecured notes; any lowering or withdrawal of the ratings assigned
to our debt securities by rating agencies; our pension liabilities;
and write down of the value of certain significant assets;
- Law and Compliance: allegations or claims by third parties that
our products or services infringe on intellectual property rights
of others, including claims against our customers and claims by our
customers to defend and indemnify them with respect to such claims;
protection of our intellectual property; changes to our tax rates
and additional income tax liabilities; uncertainties regarding
regulations, lawsuits and other related matters; and changes to
cryptocurrency regulations;
- Governance: impact of the terms of our Series A Convertible
Preferred (“Series A”) Stock relating to voting power, share
dilution and market price of our common stock; rights, preferences
and privileges of Series A stockholders compared to the rights of
our common stockholders; and actions or proposals from stockholders
that do not align with our business strategies or the interests of
our other stockholders;
- Planned Separation: an unexpected failure to complete, or
unexpected delays in completing, the necessary actions for the
planned separation, or to obtain the necessary approvals or third
party consents to complete these actions; that the potential
strategic benefits, synergies or opportunities expected from the
separation may not be realized or may take longer to realize than
expected; costs of implementation of the separation and any changes
to the configuration of businesses included in the separation if
implemented; the potential inability to access or reduced access to
the capital markets or increased cost of borrowings, including as a
result of a credit rating downgrade; the potential adverse
reactions to the planned separation by customers, suppliers,
strategic partners or key personnel and potential difficulties in
maintaining relationships with such persons and risks associated
with third party contracts containing consent and/or other
provisions that may be triggered by the planned separation; the
risk that any newly formed entity to house the commerce or ATM
business would have no credit rating and may not have access to the
capital markets on acceptable terms; unforeseen tax liabilities or
changes in tax law; requests or requirements of governmental
authorities related to certain existing liabilities; and the
ability to obtain or consummate financing or refinancing related to
the transaction upon acceptable terms or at all.
Should one or more of these risks or uncertainties materialize,
or should underlying assumptions prove incorrect, actual results
may vary materially from those set forth in the forward-looking
statements. There can be no guarantee that the planned separation
will be completed in the expected form or within the expected time
frame or at all. Nor can there be any guarantee that the commerce
business and ATM business after a separation will be able to
realize any of the potential strategic benefits, synergies or
opportunities as a result of these actions. Neither can there be
any guarantee that shareholders will achieve any particular level
of shareholder returns. Nor can there be any guarantee that the
planned separation will enhance value for shareholders, or that NCR
or any of its divisions, or separate commerce and ATM business,
will be commercially successful in the future, or achieve any
particular credit rating or financial results. Additional
information concerning these and other factors can be found in the
Company’s filings with the U.S. Securities and Exchange Commission,
including the Company’s most recent annual report on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K. Any
forward-looking statement speaks only as of the date on which it is
made. The Company does not undertake any obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Non-GAAP Financial Measures
Non-GAAP Financial Measures. While NCR reports its results in
accordance with Generally Accepted Accounting Principles in the
United States, or GAAP, in this release NCR also uses the non-GAAP
measures listed and described below.
Non-GAAP Diluted Earnings Per Share (EPS), Gross Margin
(non-GAAP), Gross Margin Rate (non-GAAP), Operating Income
(non-GAAP), and Net Income from Continuing Operations Attributable
to NCR (non-GAAP). NCR’s non-GAAP diluted EPS, gross margin
(non-GAAP), gross margin rate (non-GAAP), operating income
(non-GAAP), and net income from continuing operations attributable
to NCR (non-GAAP) are determined by excluding, as applicable,
pension mark-to-market adjustments, pension settlements, pension
curtailments and pension special termination benefits, as well as
other special items, including amortization of acquisition related
intangibles, stock-based compensation expense, and transformation
and restructuring activities, from NCR’s GAAP earnings per share,
gross margin, gross margin rate, expenses, income from operations,
interest and other income (expense), income tax expense, effective
income tax rate and net income from continuing operations
attributable to NCR, respectively. Due to the non-operational
nature of these pension and other special items, NCR's management
uses these non-GAAP measures to evaluate year-over-year operating
performance. NCR believes these measures are useful for investors
because they provide a more complete understanding of NCR's
underlying operational performance, as well as consistency and
comparability with NCR's past reports of financial results. Prior
to 2023, our calculations of these non-GAAP measures did not
exclude stock-based compensation expense. We believe that it is
useful to exclude stock-based compensation expense, which is a
non-cash expense, in order to better understand the long-term
performance of our core business and to facilitate comparison of
our results to those of peer companies over multiple periods. All
periods presented have been recast to reflect this new
definition.
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization (Adjusted EBITDA). NCR determines Adjusted EBITDA for
a given period based on its GAAP net income from continuing
operations attributable to NCR plus interest expense, net; plus
income tax expense (benefit); plus depreciation and amortization;
plus stock-based compensation expense; plus other income (expense);
plus pension mark-to-market adjustments, pension settlements,
pension curtailments and pension special termination benefits, and
other special items, including amortization of acquisition related
intangibles and transformation and restructuring charges (which
includes integration, severance and other exit and disposal costs),
among others. NCR uses Adjusted EBITDA to manage and measure the
performance of its business segments. NCR also uses Adjusted EBITDA
to manage and determine the effectiveness of its business managers
and as a basis for incentive compensation. NCR believes that
Adjusted EBITDA provides useful information to investors because it
is an indicator of the strength and performance of the Company's
ongoing business operations, including its ability to fund
discretionary spending such as capital expenditures, strategic
acquisitions and other investments.
Adjusted EBITDA margin is calculated based on Adjusted EBITDA as
a percentage of total revenue. Adjusted EBITDA margin by segment is
calculated based on segment Adjusted EBITDA divided by the related
component of revenue.
Special Item Related to Russia The war in Eastern Europe and
related sanctions imposed on Russia and related actors by the
United States and other jurisdictions required us to commence the
orderly wind down of our operations in Russia in the first quarter
of 2022. As of March 31, 2023, we have ceased operations in Russia
and are in process of dissolving our only subsidiary in Russia. As
a result, for the three months ended March 31, 2022, our non-GAAP
presentation of the measures described above exclude the immaterial
impact of our operating results in Russia, as well as the impact of
impairments taken to write down the carrying value of assets and
liabilities, severance charges, and the assessment of
collectability on revenue recognition. No charges have been
recognized for the three months ended March 31, 2023. We consider
this to be a non-recurring special item and management has reviewed
the results of its business segments excluding these impacts.
Free Cash Flow. NCR defines free cash flow as net cash provided
by (used in) operating activities less capital expenditures for
property, plant and equipment, less additions to capitalized
software, plus/minus restricted cash settlement activity, plus
acquisition-related items, and plus pension contributions and
pension settlements. NCR's management uses free cash flow to assess
the financial performance of the Company and believes it is useful
for investors because it relates the operating cash flow of the
Company to the capital that is spent to continue and improve
business operations. In particular, free cash flow indicates the
amount of cash generated after capital expenditures, which can be
used for, among other things, investment in the Company's existing
businesses, strategic acquisitions, strengthening the Company's
balance sheet, repurchase of Company stock and repayment of the
Company's debt obligations. Free cash flow does not represent the
residual cash flow available for discretionary expenditures since
there may be other nondiscretionary expenditures that are not
deducted from the measure. Free cash flow does not have uniform
definitions under GAAP and, therefore, NCR's definitions may differ
from other companies' definitions of these measures.
Constant Currency. NCR presents certain financial measures, such
as period-over-period revenue growth, on a constant currency basis,
which excludes the effects of foreign currency translation by
translating prior period results at current period monthly average
exchange rates. Due to the overall variability of foreign exchange
rates from period to period, NCR’s management uses constant
currency measures to evaluate period-over-period operating
performance on a more consistent and comparable basis. NCR’s
management believes that presentation of financial measures without
this result may contribute to an understanding of the Company's
period-over-period operating performance and provides additional
insight into historical and/or future performance, which may be
helpful for investors.
NCR's definitions and calculations of these non-GAAP measures
may differ from similarly-titled measures reported by other
companies and cannot, therefore, be compared with similarly-titled
measures of other companies. These non-GAAP measures should not be
considered as substitutes for, or superior to, results determined
in accordance with GAAP.
Use of Certain Terms
Recurring revenue includes all revenue streams from contracts
where there is a predictable revenue pattern that will occur at
regular intervals with a relatively high degree of certainty. This
includes hardware and software maintenance revenue, cloud revenue,
payment processing revenue, interchange and network revenue,
cryptocurrency-related revenue, and certain professional services
arrangements, as well as term-based software license arrangements
that include customer termination rights.
Reconciliation of Gross Margin
(GAAP) to Gross Margin (Non-GAAP)
$ in millions
Q1 2023
Q1 2022
Gross Margin (GAAP)
$
466
$
411
Transformation and restructuring costs
—
5
Stock-based compensation expense
4
4
Acquisition-related amortization of
intangibles
26
19
Russia
—
14
Gross Margin (Non-GAAP)
$
496
$
453
Reconciliation of Gross Margin
Rate (GAAP) to Gross Margin Rate (Non-GAAP)
Q1 2023
Q1 2022
Gross Margin Rate (GAAP)
24.6
%
22.0
%
Transformation and restructuring costs
—
%
0.3
%
Stock-based compensation expense
0.2
%
0.2
%
Acquisition-related amortization of
intangibles
1.4
%
1.0
%
Russia
—
%
0.8
%
Gross Margin Rate (Non-GAAP)
26.2
%
24.3
%
Reconciliation of Income from
Operations (GAAP) to Operating Income (Non-GAAP)
$ in millions
Q1 2023
Q1 2022
Income (Loss) from Operations
(GAAP)
$
110
$
33
Transformation and restructuring costs
3
27
Stock-based compensation expense
32
34
Acquisition-related amortization of
intangibles
42
41
Acquisition-related costs
—
5
Separation costs
19
—
Russia
—
18
Operating Income (Non-GAAP)
$
206
$
158
Reconciliation of Net Income
from Continuing Operations Attributable to NCR (GAAP) to Adjusted
Earnings Before Interest, Depreciation, Taxes and Amortization
(Adjusted EBITDA)
$ in millions
Q1 2023
Q1 2022
Net Income (Loss) from Continuing
Operations Attributable to NCR (GAAP)
$
9
$
(33
)
Transformation and restructuring costs
—
27
Acquisition-related amortization of
intangibles
42
41
Acquisition-related costs
—
5
Separation costs
19
—
Depreciation and amortization (excluding
acquisition-related amortization of intangibles)
106
103
Interest expense
83
63
Interest income
(3
)
(1
)
Income tax expense (benefit)
14
13
Stock-based compensation expense
32
34
Russia
—
19
Adjusted EBITDA (Non-GAAP)
$
302
$
271
Reconciliation of Diluted
Earnings Per Share from Continuing Operations (GAAP) to Non-GAAP
Diluted Earnings Per Share from Continuing Operations
(Non-GAAP)
Q1 2023
Q1 2022
Diluted Earnings Per Share from
Continuing Operations (GAAP) (1)
$
0.04
$
(0.27
)
Transformation and restructuring costs
—
0.15
Stock-based compensation expense
0.21
0.21
Acquisition-related amortization of
intangibles
0.19
0.23
Acquisition-related costs
—
0.03
Separation costs
0.09
—
Russia
—
0.13
Diluted Earnings Per Share from
Continuing Operations (Non-GAAP) (1)
$
0.56
$
0.53
(1)
Non-GAAP diluted EPS is determined using
the conversion of the Series A Convertible Preferred Stock into
common stock in the calculation of weighted average diluted shares
outstanding. GAAP EPS is determined using the most dilutive
measure, either including the impact of dividends or deemed
dividends on the Company's Series A Convertible Preferred Stock in
the calculation of net income or loss available to common
stockholders or including the impact of the conversion of the
Series A Convertible Preferred Stock into common stock in the
calculation of the weighted average diluted shares outstanding.
Therefore, GAAP diluted EPS and non-GAAP diluted EPS may not
mathematically reconcile.
Reconciliation of Net Cash
Provided by Operating Activities (GAAP) to Free Cash Flow
(Non-GAAP)
$ in millions
Q1 2023
Q1 2022
Net cash provided by (used in)
operating activities
$
317
$
38
Total capital expenditures
(83
)
(80
)
Restricted cash settlement activity
(29
)
28
Pension contributions
4
4
Free cash flow
$
209
$
(10
)
Reconciliation of As Reported
Growth % (GAAP) to Growth Constant Currency % (Non-GAAP)
Three months ended March 31,
2023
$ in millions
As Reported Growth %
Favorable (Unfavorable) FX
Impact
Growth % Constant
Currency (non-GAAP)
Revenue by segment
Retail
1
%
(3
)%
4
%
Hospitality
6
%
(1
)%
7
%
Digital Banking
—
%
—
%
—
%
Payments & Network
8
%
(3
)%
11
%
Self-Service Banking
—
%
(4
)%
4
%
Other
(21
)%
(3
)%
(18
)%
Eliminations
25
%
—
%
25
%
Total segment revenue
2
%
(2
)%
4
%
Total revenue
1
%
(3
)%
4
%
Recurring Revenue
4
%
(3
)%
7
%
Adjusted EBITDA
11
%
(8
)%
19
%
NCR CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(in millions, except per share
amounts)
Schedule A
For the Periods Ended March
31
Three Months
2023
2022
Revenue
Product
$
521
$
516
Service
1,370
1,350
Total Revenue
1,891
1,866
Cost of products
456
492
Cost of services
969
963
Total gross margin
466
411
% of Revenue
24.6
%
22.0
%
Selling, general and administrative
expenses
292
313
Research and development expenses
64
65
Income (loss) from operations
110
33
% of Revenue
5.8
%
1.8
%
Interest expense
(83
)
(63
)
Other income (expense), net
(3
)
9
Total interest and other expense, net
(86
)
(54
)
Income (loss) from continuing
operations before income taxes
24
(21
)
% of Revenue
1.3
%
(1.1
)%
Income tax expense (benefit)
14
13
Income (loss) from continuing
operations
10
(34
)
Income (loss) from discontinued
operations, net of tax
—
(1
)
Net income (loss)
10
(35
)
Net income (loss) attributable to
noncontrolling interests
1
(1
)
Net income (loss) attributable to
NCR
$
9
$
(34
)
Amounts attributable to NCR common
stockholders:
Income (loss) from continuing
operations
$
9
$
(33
)
Dividends on convertible preferred
stock
(4
)
(4
)
Income (loss) from continuing operations
attributable to NCR common stockholders
5
(37
)
Income (loss) from discontinued
operations, net of tax
—
(1
)
Net income (loss) attributable to NCR
common stockholders
$
5
$
(38
)
Income (loss) per share attributable to
NCR common stockholders:
Income (loss) per common share from
continuing operations
Basic
$
0.04
$
(0.27
)
Diluted (1)
$
0.04
$
(0.27
)
Net income (loss) per common
share
Basic
$
0.04
$
(0.28
)
Diluted (1)
$
0.04
$
(0.28
)
Weighted average common shares
outstanding
Basic
139.6
135.7
Diluted (1)
141.7
135.7
(1)
Diluted EPS is determined using the most
dilutive measure, either including the impact of the dividends and
deemed dividends on NCR's Series A Convertible Preferred Shares in
the calculation of net income or loss per common share from
continuing operations and net income or loss per common share or
including the impact of the conversion of such preferred stock into
common stock in the calculation of the weighted average diluted
shares outstanding.
NCR CORPORATION
REVENUE AND ADJUSTED EBITDA
SUMMARY
(Unaudited)
(in millions)
Schedule B
For the Periods Ended March
31
Three Months
2023
2022
% Change
% Change Constant
Currency
Revenue by segment
Retail
$
552
$
546
1
%
4
%
Hospitality
223
211
6
%
7
%
Digital Banking
136
136
—
%
—
%
Payments & Network
323
299
8
%
11
%
Self-Service Banking
613
611
—
%
4
%
Other
54
68
(21
)%
(18
)%
Eliminations
(10
)
(8
)
25
%
25
%
Total segment revenue
$
1,891
$
1,863
2
%
4
%
Other adjustment (1)
—
3
Total revenue
$
1,891
$
1,866
1
%
4
%
Adjusted EBITDA by segment
Retail
$
97
$
67
45
%
Retail Adjusted EBITDA margin %
17.6
%
12.3
%
Hospitality
53
41
29
%
Hospitality Adjusted EBITDA margin %
23.8
%
19.4
%
Digital Banking
49
56
(13
)%
Digital Banking Adjusted EBITDA margin
%
36.0
%
41.2
%
Payments & Network
83
98
(15
)%
Payments & Network Adjusted EBITDA
margin %
25.7
%
32.8
%
Self-Service Banking
138
112
23
%
Self-Service Banking Adjusted EBITDA
margin %
22.5
%
18.3
%
Corporate and Other (2)
(110
)
(97
)
13
%
Eliminations
(8
)
(6
)
33
%
Total Adjusted EBITDA
$
302
$
271
11
%
19
%
Total Adjusted EBITDA margin %
16.0
%
14.5
%
(1)
Other adjustment reflects the revenue
attributable to the Company's operations in Russia for the three
months ending March 31, 2022 that were excluded from management's
measure of revenue due to our previous announcement to suspend
sales to Russia and anticipated orderly wind down of our operations
in Russia beginning in the first quarter of 2022. Refer to the
section entitled "Non-GAAP Financial Measures" for additional
information.
(2)
Corporate and Other includes income and
expenses related to corporate functions that are not specifically
attributable to an individual reportable segment along with any
immaterial operating segment(s).
NCR CORPORATION
CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in millions, except per share
amounts)
Schedule C
March 31, 2023
December 31, 2022
Assets
Current assets
Cash and cash equivalents
$
519
$
505
Accounts receivable, net of allowances of
$37 and $34 as of March 31, 2023 and December 31, 2022,
respectively
1,009
1,083
Inventories
792
772
Restricted cash
257
228
Prepaid and other current assets
493
494
Total current assets
3,070
3,082
Property, plant and equipment, net
681
663
Goodwill
4,542
4,540
Intangibles, net
1,105
1,145
Operating lease assets
353
371
Prepaid pension cost
217
212
Deferred income taxes
595
598
Other assets
879
896
Total assets
$
11,442
$
11,507
Liabilities and stockholders’
equity
Current liabilities
Short-term borrowings
$
105
$
104
Accounts payable
952
942
Payroll and benefits liabilities
223
207
Contract liabilities
631
537
Settlement liabilities
269
250
Other current liabilities
636
673
Total current liabilities
2,816
2,713
Long-term debt
5,406
5,561
Pension and indemnity plan liabilities
615
614
Postretirement and postemployment benefits
liabilities
88
91
Income tax accruals
97
97
Operating lease liabilities
340
353
Other liabilities
317
324
Total liabilities
9,679
9,753
Series A convertible preferred stock: par
value $0.01 per share, 3.0 shares authorized, 0.3 issued and
outstanding as of March 31, 2023 and December 31, 2022,
respectively; redemption amount and liquidation preference of $276
as of March 31, 2023 and December 31, 2022, respectively
275
275
Stockholders' equity
NCR stockholders' equity:
Preferred stock: par value $0.01 per
share, 100.0 shares authorized, no shares issued and outstanding as
of March 31, 2023 and December 31, 2022, respectively
—
—
Common stock: par value $0.01 per share,
500.0 shares authorized, 140.1 and 138.0 shares issued and
outstanding as of March 31, 2023 and December 31, 2022,
respectively
1
1
Paid-in capital
727
704
Retained earnings
1,080
1,075
Accumulated other comprehensive loss
(319
)
(300
)
Total NCR stockholders' equity
1,489
1,480
Noncontrolling interests in
subsidiaries
(1
)
(1
)
Total stockholders' equity
1,488
1,479
Total liabilities and stockholders'
equity
$
11,442
$
11,507
NCR CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
(in millions)
Schedule D
For the Periods Ended March
31
Three Months
2023
2022
Operating activities
Net income (loss)
$
10
$
(35
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Loss (income) from discontinued
operations
—
1
Depreciation and amortization
151
147
Stock-based compensation expense
32
34
Deferred income taxes
6
4
Loss (gain) on disposal of property, plant
and equipment and other assets
2
2
(Gain) loss on divestiture
(3
)
—
Changes in assets and liabilities:
Receivables
63
(129
)
Inventories
(45
)
(77
)
Current payables and accrued expenses
20
(63
)
Contract liabilities
95
105
Employee benefit plans
(16
)
(8
)
Other assets and liabilities
2
57
Net cash provided by operating
activities
$
317
$
38
Investing activities
Expenditures for property, plant and
equipment
$
(19
)
$
(15
)
Additions to capitalized software
(64
)
(65
)
Business acquisitions, net of cash
acquired
(6
)
(1
)
Proceeds from divestiture, net
3
—
Other investing activities, net
—
(5
)
Net cash used in investing
activities
$
(86
)
$
(86
)
Financing activities
Short term borrowings, net
$
—
$
2
Payments on term credit facilities
(26
)
(2
)
Payments on revolving credit
facilities
(448
)
(279
)
Borrowings on revolving credit
facilities
318
312
Cash dividend paid for Series A preferred
shares dividends
(4
)
(4
)
Proceeds from employee stock plans
6
6
Tax withholding payments on behalf of
employees
(16
)
(36
)
Net change in client funds obligations
—
6
Principal payments for finance lease
obligations
(5
)
(4
)
Other financing activities
—
—
Net cash provided by (used in)
financing activities
$
(175
)
$
1
Cash flows from discontinued
operations
Net cash provided by (used in) operating
activities of discontinued operations
(6
)
(4
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(10
)
(6
)
Increase (decrease) in cash, cash
equivalents, and restricted cash
$
40
$
(57
)
Cash, cash equivalents and restricted
cash at beginning of period
740
749
Cash, cash equivalents, and restricted
cash at end of period
$
780
$
692
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504005928/en/
News Media Contact Scott Sykes NCR Corporation
scott.sykes@ncr.com
Investor Contact Michael Nelson NCR Corporation
678.808.6995 michael.nelson@ncr.com
NCR (NYSE:NCR)
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