DULUTH, Ga.--(BUSINESS WIRE)--Mar. 13, 2017--
NCR Corporation (NYSE: NCR) today announced that it has entered into an
agreement with Blackstone (NYSE: BX), under which Blackstone is granted
an early release from its lockup to sell a portion of its holdings to
allow it to recoup its investment, while at the same time extending the
lockup period on the remainder of that investment. The transaction,
which will increase NCR’s planned 2017 share repurchases, is expected to
deliver value to NCR stockholders and further optimize the Company’s
capital structure.
“Given that Blackstone’s lock-up period for its perpetual convertible
preferred shares is set to expire in early June, and as our common stock
is approaching the mandatory 2018 conversion price of $54 for those
preferred shares, we recently engaged with Blackstone on options for
their investment,” said NCR Chairman and CEO Bill Nuti. “In a win-win
solution, we have agreed to provide Blackstone with an early release to
sell 49% of its holdings, or approximately 14.4 million shares on an as
converted basis.” As part of the transaction, Blackstone will convert
90,000 of their convertible preferred shares into approximately 3
million shares of common stock, and NCR will repurchase those shares as
part of its ongoing buyback programs. Nuti added, “This transaction is
more accretive to our stockholders than further open market purchases,
eliminates the ongoing dividend costs on the preferred shares, is
accretive to EPS, and reduces our financial leverage.”
“We are pleased to continue to partner with NCR and are absolutely
committed to the ongoing success of the company. After this transaction,
we will continue to own close to our original investment amount in the
company, at over $720 million,” said Greg Blank, Managing Director,
Private Equity, at Blackstone. “Given the strong partnership between
Blackstone and NCR, Blackstone is extending the lockup on our remaining
51% stake by another six months to December 1, 2017, and we will
continue to have two seats on the NCR Board of Directors.”
Updating Guidance; EPS Effect
The Company is increasing full year non-GAAP EPS guidance by $0.02 due
to the accretive nature of the transaction to $3.27 to $3.37, up from
previous guidance of $3.25 to $3.35. The full year GAAP EPS is expected
to be lower by approximately $0.10 and the first quarter GAAP EPS is
expected to be lower by approximately $0.50 due to the one-time non-cash
accounting impact of the redemption of the preferred shares. The Company
does not expect this change to impact its first quarter non-GAAP EPS
guidance, which is reaffirmed. Excluded from the full year and first
quarter GAAP EPS guidance is the potential one-time accounting impact
associated with the modification to the lock-up period. Therefore, the
Company believes that a reconciliation of non-GAAP EPS to its most
directly comparable GAAP financial measure, GAAP EPS, is not meaningful
or available without unreasonable effort. All other previous guidance is
reaffirmed.
Share Repurchase Programs
NCR has repurchased approximately 4.4 million shares of its common stock
for approximately $204 million thus far in 2017 under its previously
disclosed authorized share repurchase programs. As part of this
transaction, NCR plans to increase its planned 2017 share repurchases to
approximately $350 million from the previous $300 million.
Additionally, on March 12, 2017, the Company’s board of directors
authorized a new $300 million share repurchase program to succeed its
2016 program, under which no availability will remain following the
repurchase of shares from Blackstone. The timing and amount of any
repurchases under the new program will depend upon market conditions.
Repurchases under the new program may be made from time to time in the
open market, private transactions, accelerated stock repurchase
programs, issuer self-tenders or otherwise, and may be discontinued at
any time.
Forward-Looking Statements
This release contains forward-looking statements. Forward-looking
statements use words such as “expect,” “anticipate,” “outlook,”
“intend,” “plan,” “believe,” “will,” “should,” “would,” “could” and
words of similar meaning. 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, including
the consummation of the expected share repurchase described herein, are
examples of forward-looking statements. The forward-looking statements
in this release include statements about NCR’s financial guidance for
2017 (including the section entitled “Updating Guidance; EPS Effect”).
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 difficulties or delays in, or the inability to,
close the share repurchase described herein, those factors relating to:
domestic and global economic and credit conditions including, in
particular, those resulting from uncertainty in the Chinese economy,
economic sanctions against Russia, the determination by Britain to exit
the European Union and further potential changes in Eurozone
participation, the potential for changes to global or regional trade
agreements or the imposition of protectionist trade policies, and the
imposition of import or export tariffs or border adjustments; the impact
of our indebtedness and its terms on our financial and operating
activities; the impact of the terms of our strategic relationship with
Blackstone and our Series A Convertible Preferred Stock; the
transformation of our business model and our ability to sell
higher-margin software and services; the possibility of disruptions in
or problems with our data center hosting facilities; cybersecurity risks
and compliance with data privacy and protection requirements; foreign
currency fluctuations; our ability to successfully introduce new
solutions and compete in the information technology industry; our
ability to improve execution in our sales and services organizations;
defects or errors in our products; manufacturing disruptions;
collectability difficulties in subcontracting relationships in Emerging
Industries; the historical seasonality of our sales; the availability
and success of acquisitions, divestitures and alliances, including the
divestiture of our Interactive Printer Solutions business; our pension
strategy and underfunded pension obligation; the success of our
restructuring plans and cost reduction initiatives; tax rates; reliance
on third party suppliers; development and protection of intellectual
property; workforce turnover and the ability to attract and retain
skilled employees; environmental exposures from our historical and
ongoing manufacturing activities; and uncertainties with regard to
regulations, lawsuits, claims and other matters across various
jurisdictions. 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, current reports on Form
8-K and other documents that we file or furnish with the U.S. Securities
and Exchange Commission. 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.
About NCR Corporation
NCR Corporation (NYSE: NCR) is the global leader in omni-channel
solutions, turning everyday interactions with businesses into
exceptional experiences. With its software, hardware, and portfolio of
services, NCR enables nearly 550 million transactions daily across the
financial, retail, hospitality, travel, telecom and technology
industries. NCR solutions run the everyday transactions that make your
life easier. NCR is headquartered in Duluth, Georgia with over 32,000
employees and does business in 180 countries. NCR is a trademark of NCR
Corporation in the United States and other countries. NCR encourages
investors to visit its web site which is updated regularly with
financial and other important information about NCR.
Web site: www.ncr.com
Twitter: @NCRCorporation
Facebook: www.facebook.com/ncrcorp
LinkedIn: http://linkd.in/ncrgroup
YouTube: www.youtube.com/user/ncrcorporation
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.
Diluted EPS (non-GAAP). NCR’s diluted earnings per share
(non-GAAP) is determined by excluding pension mark-to-market
adjustments, pension settlements, pension curtailments and pension
special termination benefits and other special items, including
amortization of acquisition related intangibles, from NCR’s GAAP
earnings per share.
Due to the non-operational nature of these pension and other special
items, NCR's management uses this non-GAAP measure to evaluate
year-over-year operating performance. NCR also uses diluted EPS
(non-GAAP) to manage and determine the effectiveness of its business
managers and as a basis for incentive compensation. NCR believes this
measure is useful for investors because it provides a more complete
understanding of NCR's underlying operational performance, as well as
consistency and comparability with NCR's past reports of financial
results.
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170313005515/en/
Source: NCR Corporation
NCR Corporation
Scott Sykes, 212-589-8428
scott.sykes@ncr.com
or
Investor
Relations:
Michael Nelson, 678-808-6995
michael.nelson@ncr.com