UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
(RULE 14d-100)
Tender Offer Statement Pursuant to Section 14(d)(1) or 13(e)(1) of
the Securities Exchange Act of 1934
Radiant Systems, Inc.
(Name of Subject Company)
Ranger Acquisition Corporation
and
NCR Corporation
(Names of Filing Persons – Offeror)
COMMON STOCK, NO PAR VALUE PER SHARE
(Title of Class of Securities)
75025N 10 2
(Cusip Number of Class of Securities)
Jennifer M. Daniels
NCR Corporation
3097 Satellite Boulevard
Duluth, Georgia 30096
(937) 445-5000
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Filing Persons)
Copies to:
Betty O. Temple, Esq.
Womble Carlyle Sandridge & Rice, PLLC
271 17th Street, NW
Suite 2400
Atlanta, Georgia 30363-1017
(404) 872-7000
CALCULATION OF FILING FEE
| Transaction valuation* | Amount of filing fee | |
| Not Applicable | Not Applicable |
| * | A filing fee is not required in connection with this filing as it relates solely to preliminary communications made before the commencement of a tender offer. |
| ¨ | Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| Amount Previously Paid: Not applicable. | Filing Party: Not applicable. | |||||
| Form or Registration No.: Not applicable. | Date Filed: Not applicable. | |||||
| x | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
| x | third-party tender offer subject to Rule 14d-1. |
| ¨ | issuer tender offer subject to Rule 13e-4. |
| ¨ | going-private transaction subject to Rule 13e-3. |
| ¨ | amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the results of the tender offer. ¨
This Tender Offer Statement on Schedule TO (this “Statement”) relates to a planned tender offer by Ranger Acquisition Corporation (“Purchaser”), a wholly-owned subsidiary of NCR Corporation (“NCR”), for all shares of outstanding common stock of Radiant Systems, Inc. (“Radiant”), to be commenced pursuant to an Agreement and Plan of Merger, dated as of July 11, 2011, by and among NCR, the Purchaser and Radiant.
Important Additional Information
The tender offer referred to in this Statement has not yet commenced. This Statement is neither an offer to purchase nor a solicitation of an offer to sell any shares of Radiant. The solicitation and the offer to buy shares of Radiant common stock will be made pursuant to an offer to purchase and related materials that NCR and Purchaser intend to file with the U.S. Securities and Exchange Commission (the “SEC”). At the time the tender offer is commenced, NCR and Purchaser intend to file a Tender Offer Statement on Schedule TO containing an offer to purchase, a form of letter of transmittal and other documents relating to the tender offer and Radiant intends to file a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the tender offer. NCR, Purchaser and Radiant intend to mail these documents to the shareholders of Radiant. These documents will contain important information about the tender offer and shareholders of Radiant are urged to read them carefully when they become available. Investors and shareholders of Radiant will be able to obtain a free copy of these documents (when they become available) and other documents filed by NCR, Purchaser and Radiant with the SEC at the website maintained by the SEC at www.sec.gov. In addition, the tender offer statement and related materials may be obtained for free (when they become available) by directing such requests to NCR Corporation at Attention:
Investor Relations, 3097 Satellite Boulevard, Duluth, GA 30096. Investors and shareholders of Radiant may obtain a free copy of the solicitation/recommendation statement and other documents (when they become available) from Radiant by directing requests to Radiant Systems, Inc. at 3925 Brookside Parkway, Alpharetta, GA 30022, Attn: Investor Relations Director.
Item 12. Exhibits
| Exhibit Number |
Description | |
| 99.1 | Press release, dated July 21, 2011 | |
| 99.2 | Key Media Messages and Questions & Answers, dated July 21, 2011 | |
Exhibit 99.1
|
NEWS RELEASE |
July 21, 2011
NCR announces strong second-quarter results
| • | Operational results ahead of company expectations |
| • | Revenue growth of 12%; orders up 15% compared to prior year period |
| • | GAAP Diluted EPS from continuing operations of $0.22 compared to $0.12 in the prior year period; non-GAAP Diluted EPS from continuing operations(1) of $0.46, an increase of 31% from the prior year period |
| • | NCR raises full year 2011 revenue and earnings guidance |
DULUTH, Georgia – NCR Corporation (NYSE: NCR) reported financial results today for the three months ended June 30, 2011. Reported revenue of $1.31 billion increased 12 percent from the second quarter of 2010. Second-quarter revenues reflect a favorable impact of 6 percent as a result of foreign currency translation.
NCR reported second-quarter income from continuing operations (attributable to NCR) of $35 million, or $0.22 per diluted share, compared to income from continuing operations (attributable to NCR) of $20 million, or $0.12 per diluted share, in the second quarter of 2010. Income from continuing operations in the second quarter of 2011 included $53 million ($38 million or $0.23 per diluted share, after-tax) of pension expense and $1 million ($1 million or $0.01 per diluted share, after tax) of acquisition related costs. Income from continuing operations for the second quarter of 2010 included $50 million ($33 million or $0.20 per diluted share, after-tax) of pension expense and $7 million ($4 million or $0.03 per diluted share, after-tax) of incremental costs related to the relocation of the Company’s global headquarters. Excluding these items, non-GAAP income from continuing operations(1) in the second quarter of 2011 was $0.46 per diluted share compared to $0.35 in the prior year period.
“Our second quarter performance was driven by the NCR team’s ongoing ability to execute on our strategy and our growth initiatives and provides us the confidence to increase our full year guidance,” said Bill Nuti, chairman and chief executive officer of NCR. “We continue to capitalize on growing business opportunities in our core industries where our leadership resulted in strong order activity and revenue growth, reflecting increased demand in our core solutions both domestically and internationally. Our recently-announced plan to acquire Radiant Systems will extend that core by moving us into a leadership position in a third vertical that is exceptionally complementary to our financial and retail businesses and that offers compelling growth potential. At the same time, we’re extending our lead in emerging industries like Telecom and Technology and Travel. And we’re extremely well-positioned in our Entertainment business while also exploring partnerships or other alternatives for our DVD kiosk operations.”
Second-Quarter 2011 Operating Segment Results(2)
Financial Services
The Financial Services segment generated second-quarter revenue of $729 million, an increase of 15 percent from the second quarter of 2010. Growth was evident across most geographies, including the Brazil/India/China/Middle East/Africa (BICMEA), North America, Europe, and Caribbean and Latin America (CLA) theaters. The second-quarter year-over-year revenue comparison included 7 percentage points of benefit from foreign currency translation.
Operating income for Financial Services was $77 million in the second quarter of 2011 as compared to $75 million in the second quarter of 2010. This increase was driven by higher revenue partially offset by an unfavorable shift in product mix and continued investment in sales resources.
Retail & Hospitality
The Retail & Hospitality segment reported revenue of $449 million, up 3 percent from the second quarter of 2010, driven largely by growth in the BICMEA, North America and South Asia Pacific theaters. The second quarter year-over-year revenue comparison included 5 percentage points of benefit from foreign currency translation.
Operating income for Retail & Hospitality was $22 million in the second quarter of 2011 as compared to $15 million in the second quarter of 2010. This increase was driven by higher revenue, an improved product mix, and lower service delivery costs.
Entertainment
Entertainment reported revenue of $38 million, an increase of 65 percent from the $23 million recorded in the second quarter of 2010. Year over year same store sales growth was up 30% as a result of new entertainment kiosk deployments and the Company’s strategy to redeploy selected kiosks to better performing locations.
Operating loss for Entertainment was $17 million in the second quarter of 2011 as compared to a loss of $10 million in the second quarter of 2010. This decrease was driven by additional kiosk and DVD depreciation from increased kiosk deployment.
Emerging Industries
Emerging Industries revenue was $96 million, an increase of 16 percent versus the prior year period as a result of strong performance in the North America and Europe theaters.
The second-quarter year-over-year revenue comparison included 7 percentage points of benefit from foreign currency translation.
Operating income for Emerging Industries was $19 million in the second quarter of 2011 as compared to $8 million in the second quarter of 2010. This increase was primarily driven by improved product and services mix and lower service delivery costs.
Second-Quarter 2011 Business Highlights
In the second quarter of 2011, NCR further advanced the deployment and introduction of self-service solutions across its core and emerging industries. The following are NCR’s second quarter business highlights:
In the financial services segment, NCR continues to advance its Scalable Deposit Module (SDM) technology with more customers, shape the future of consumer transactions, and drive penetration of its APTRATM solutions.
A number of major ATM networks completed their certification testing of SDM, establishing the new technology as compatible with key software systems. NCR is in the process of completing the certification testing process with additional networks and has received orders for nearly 7,000 SDM units since the product was introduced in October of 2010.
NCR has also taken steps to drive the future of ATM technology and bank branch transformation. NCR announced the global launch of the next generation of NCR Financial Kiosk – the SelfServTM 4 and the SelfServTM 8 – which offer consumers the convenience of bypassing teller lines and quickly completing typical branch transactions such as account opening, account maintenance and financial products research and purchase.
NCR also recently integrated two-way video conferencing into its multi-function SelfServTM 32 ATMs which allows consumers to video conference with live, remote bank tellers directly from the ATM. The technology enables financial institutions to offer up to 24 hour access to teller services, build new small-footprint branches, and provide teller services in areas not served by branches.
In addition, Broadway Bank, a $2.3 billion financial institution serving south central Texas, will deploy NCR SelfServTM ATMs to replace currently installed machines and will utilize NCR Solidcore for APTRATM as well as NCR’s second line hardware and software maintenance.
NCR recently announced the rollout of NCR APTRATM Cash Connect 6.0, software designed to help financial institutions and employees use, monitor and integrate multi-vendor teller automation units such as teller cash recyclers (TCRs). APTRATM Cash Connect 6.0 supports all major teller automation units (TAU) in the market today.
HDFC Bank, India’s second largest private bank, earned a 2011 Celent Model Bank Award for its customer experience which was created through the implementation of NCR APTRATM eMarketing solution. The advanced marketing software enabled HDFC Bank to personalize self-service experiences while delivering targeted and consistent messages through multiple channels including ATM, email, Internet, mobile and call centers.
VTB Bank, one of the leading providers of financial services in Russia, implemented the NCR APTRA Relate™ software to extend the functionality of their ATMs and create marketing campaigns based on customer data taken from their CRM system. The software will help VTB engage in personalized dialogue with its more than 300,000 customers and sell additional financial products.
In the retail space, Wine Country Gift Baskets a leading retailer of online gift baskets, signed a multi-year renewal of NCR’s APTRA™ eMarketing solution which enables synchronized customer communications across multiple channels. NCR also announced a new software release (7.0) of its Advanced Checkout Solution with enhancements that will help grocers increase business agility, lower operating costs and provide an improved shopping experience for customers.
In its June 2011 report titled “Global EPOS and Self-Checkout 2011,” Retail Banking Research (RBR) ranked NCR as the global market leader in the rapidly growing self-checkout market. According to the report, NCR is by far the world’s largest self-checkout supplier in terms of both installed base and shipments
In the Entertainment business, NCR is installing more than 800 BLOCKBUSTER Express®-branded movie kiosks at Food Lion grocery stores across 11 states in the Southeast and Mid-Atlantic. The kiosks will also be available at other Delhaize America supermarkets, including Bottom Dollar Food, Harveys and Reid’s grocery stores.
NCR continued to advance its self service technologies across its emerging industries. NCR and Frontier Airlines announced the roll-out of 75 NCR TouchPort™ 70 kiosks to an additional 14 airports across the U.S. The deployment expands the existing footprint of Frontier Airlines’ kiosks, facilitating quick and convenient self-service check-in and other flight related services. In addition, Copa Airlines, one of Latin America’s leading carriers, has launched mobile check-in and boarding pass delivery technologies from NCR which will allow Copato continue to enhance its customers’ travel experiences.
In the healthcare business, NCR strengthened its product line through the selection of Electronic Payment Exchange (EPX) as its preferred payment provider. The integration of EPX’s technology with NCR MediKiosk and NCR Patient Portal self-service solutions can help healthcare organizations lower transaction fees by streamlining the number of payment providers. During the quarter, Conifer and Blair Medical Associates became the first customers to integrate this single-source payment capability.
NCR’s global services business and its commitment to fulfilling customer needs continue to receive third party recognition. Gartner ranked NCR as the global market share leader in retail industry product support for 2010 based on product support revenue in their March 31, 2011 report “Market Share Analysis: IT Services, Worldwide, 2010.” Gartner also reported that NCR ranked third worldwide in financial services product support revenue and tenth worldwide across all vertical markets in hardware maintenance and support revenue in 2010. In addition, NCR recently reached its highest ranking to date (8th overall) in the 2011 Global Outsourcing 100® rankings awarded by the International Association of Outsourcing Professionals® (IAOP®). NCR demonstrated excellence in evaluation categories including global presence, customer references, company recognitions and certifications, employee management and executive leadership.
Second-Quarter 2011 Financial Highlights
Income from operations was $47 million in the second quarter of 2011, which included $53 million of pension expense and $1 million of acquisition related costs. This compares to $31 million of income from operations in the second quarter of 2010, which included
$50 million of pension expense and $7 million of incremental costs related to the relocation of the Company’s global headquarters. Excluding these items, non-GAAP income from operations(2) was $101 million in the second quarter of 2011 compared to $88 million in the second quarter of 2010.
Net cash provided by operating activities was $64 million during the second quarter of 2011 compared to $87 million in the year-ago period. Cash from operating activities in the second quarter of 2011 was negatively impacted by investment in working capital period over period due to higher revenues in the second quarter of 2011 and for the remainder of the year. Net capital expenditures of $42 million in the second quarter of 2011 increased from the $38 million in net capital expenditures in the second quarter of 2010. Discontinued operations yielded $7 million of cash outflow in the second quarter 2011 compared to $8 million of cash provided in the second quarter of 2010. NCR generated break-even free cash flow (cash from operations and discontinued operations, less capital expenditures and additions to capitalized software)(3) in the second quarter of 2011, compared to free cash flow of $42 million in the second quarter of 2010. Additionally, NCR generated free cash flow of $4 million in the six months ended June 30, 2011, compared to free cash flow of $5 million in the six months ended June 30, 2010.
NCR contributed approximately $24 million to its international and executive pension plans in the second quarter of 2011 compared to $25 million in the second quarter of 2010. The company expects to contribute approximately $125 million in 2011. The net funded status of the company’s global pension plans was approximately $(997) million as of December 31, 2010, an improvement of $51 million from the previous year end.
Other expense, net was $2 million in the second quarter of 2011 compared to no other income or expense in the prior year period.
Income tax expense was $8 million in the second quarter of 2011 compared to $11 million in the second quarter of 2010. NCR expects its full year 2011 effective income tax rate to be approximately 27%.
NCR repurchased approximately 1.8 million shares of its common stock for approximately $35 million during the second quarter.
NCR ended the second quarter of 2011 with $457 million in cash and cash equivalents compared to the $480 million balance as of March 31, 2011. As of June 30, 2011, NCR had a debt balance of $11 million.
2011 Outlook
NCR expects full-year 2011 revenues to increase in the range of 6 to 8 percent on a constant currency basis compared with 2010, up from previous guidance of 5 to 7 percent growth. Including the continuing investment in the entertainment portfolio, the company now expects its full-year 2011 Income from Operations (GAAP) to be $174 million to $189 million, non-GAAP non-pension operating income (NPOI)(2) to be in the range of $385 to $400 million, GAAP diluted earnings per share to be $0.79 to $0.86 and non-GAAP diluted earnings per share excluding pension expense (1) to be in the range of $1.73 to $1.80 per diluted share. The 2011 non-GAAP EPS guidance excludes estimated pension expense of $210 million (approximately $151 million after-tax) compared with actual pension expense of $208 million ($149 million after-tax) in 2010. NCR expects its full year 2011 effective income tax rate to be approximately 27 percent. These amounts are exclusive of the pending acquisition of Radiant Systems Inc.
The company expects third quarter 2011 non-pension operating income (NPOI)(2) to be in the range of $100 million to $105 million, compared to $90 million in the third quarter of 2010. The company expects its third quarter 2011 effective tax rate to be in the range of 27% to 31%.
| Current 2011 Guidance |
Prior 2011 Guidance |
2010 Actual | ||||||
| Year-over-year revenue (constant currency) |
6% - 8% | 5% - 7% | 3% | |||||
| Income from Operations (GAAP) |
$174 - $189 million |
|
$170 - $185 million |
|
$99 million | |||
| Non-pension operating income(2) |
$385 - $400 million |
|
$380 - $395 million |
|
$333 million | |||
| Diluted earnings per share (GAAP) |
$0.79 - $0.86 | $0.77 - $0.84 | $0.69 | |||||
| Diluted earnings per share excluding pension expense and special items (non-GAAP)(1) |
$1.73 - $1.80 | $1.70 - $1.77 | $1.53 | |||||
2011 Second Quarter Earnings Conference Call
A conference call is scheduled today at 5:45 p.m. (EST) to discuss the company’s 2011 second-quarter results and guidance for full-year 2011. Access to the conference call, as well as a replay of the call, is available on NCR’s Web site at http://investor.ncr.com/.
Important Information
The planned tender offer related to the pending acquisition of Radiant Systems, Inc has not yet commenced. This description is not an offer to buy or the solicitation of an offer to sell securities. At the time the planned tender offer is commenced, NCR will file a tender offer statement on Schedule TO with the Securities and Exchange Commission (the “SEC”), and Radiant Systems will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the planned tender offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other tender offer documents) and the solicitation/recommendation statement will contain important information that should be read carefully before making any decision to tender securities in the planned tender offer. Those materials will be made available to Radiant Systems shareholders at no expense to them. In addition, all of those materials (and all other tender offer documents filed with the SEC) will be made available at no charge on the SEC’s website: www.sec.gov.
About NCR Corporation
NCR Corporation (NYSE: NCR) is a global technology company leading how the world connects, interacts and transacts with business. NCR’s assisted- and self-service solutions and comprehensive support services address the needs of retail, financial, travel, healthcare, hospitality, entertainment, gaming and public sector organizations in more than 100 countries. NCR (www.ncr.com) is headquartered in Duluth, Georgia.
# # #
NCR is a trademark of NCR Corporation in the United States and other countries.
News Media Contact
Cameron Smith
NCR Corporation
770.623.7998
cameron.smith@ncr.com
Investor Contact
Gavin Bell
NCR Corporation
212.589.8468
gavin.bell@ncr.com
Reconciliation of Diluted Earnings Per Share from Continuing Operations (attributable to NCR) (GAAP) to Non-GAAP Measures
| Q2 2011 Actual |
Q2 2010 Actual |
Current 2011 Guidance |
Prior 2011 Guidance |
FY 2010 Actual |
||||||||||||||||
| Diluted Earnings Per Share from Continuing Operations (attributable to NCR) (GAAP) |
$ | 0.22 | $ | 0.12 | $ | 0.79-$0.86 | $ | 0.77-$0.84 | $ | 0.69 | ||||||||||
| Pension expense |
(0.23 | ) | (0.20 | ) | (0.94 | ) | (0.94 | ) | (0.93 | ) | ||||||||||
| Acquisition related costs |
(0.01 | ) | — | (0.01 | ) | — | — | |||||||||||||
| Global headquarters relocation |
— | (0.03 | ) | — | — | (0.07 | ) | |||||||||||||
| Legal settlements and charges |
— | — | 0.01 | 0.01 | (0.03 | ) | ||||||||||||||
| Investment impairment charge |
— | — | — | — | (0.05 | ) | ||||||||||||||
| Japanese subsidiary valuation reserve |
— | — | — | — | 0.24 | |||||||||||||||
| Diluted Earnings Per Share from Continuing Operations (attributable to NCR) (non-GAAP) (1) |
$ | 0.46 | $ | 0.35 | $ | 1.73-$1.80 | $ | 1.70-$1.77 | $ | 1.53 | ||||||||||
Reconciliation of Income from Operations (GAAP) to Non-GAAP Measure (in millions)
| Q2 2011 Actual |
Q2 2010 Actual |
Q3 2011 Guidance |
Q3 2010 Actual |
Current 2011 Guidance |
Prior 2011 Guidance |
FY 2010 Actual |
||||||||||||||||||||||
| Income from Operations (GAAP) |
$ | 47 | $ | 31 | $ | 45-$50 | $ | 34 | $ | 174-$189 | $ | 170-$185 | $ | 99 | ||||||||||||||
| Pension expense |
$ | 53 | $ | 50 | $ | 55 | $ | 50 | $ | 210 | $ | 210 | $ | 208 | ||||||||||||||
| Acquisition related costs |
$ | 1 | — | — | — | $ | 1 | — | — | |||||||||||||||||||
| Global headquarters relocation |
— | $ | 7 | — | $ | 6 | — | — | $ | 18 | ||||||||||||||||||
| Legal charges |
— | — | — | — | — | — | $ | 8 | ||||||||||||||||||||
| Non-pension Operating Income (non-GAAP) (2) |
$ | 101 | $ | 88 | $ | 100-$105 | $ | 90 | $ | 385-$400 | $ | 380-$395 | $ | 333 | ||||||||||||||
Free Cash Flow
| For the Periods Ended June 30 | ||||||||||||||||
| (in millions) | ||||||||||||||||
| Three Months | Six Months | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net cash provided by operating activities (GAAP) |
$ | 64 | $ | 87 | $ | 108 | $ | 109 | ||||||||
| Less capital expenditures for: |
||||||||||||||||
| Property, plant and equipment, net of grant reimbursements |
(42 | ) | (38 | ) | (67 | ) | (76 | ) | ||||||||
| Capitalized software |
(15 | ) | (15 | ) | (29 | ) | (28 | ) | ||||||||
| Total capital expenditures, net |
(57 | ) | (53 | ) | (96 | ) | (104 | ) | ||||||||
| Net cash (used in) provided by discontinued operations |
(7 | ) | 8 | (8 | ) | — | ||||||||||
| Free cash flow (non-GAAP)(3) |
$ | 0 | $ | 42 | $ | 4 | $ | 5 | ||||||||
(1) While NCR reports its results in accordance with Generally Accepted Accounting Principles in the United States, or GAAP, it believes that certain non-GAAP measures provide additional useful information regarding NCR’s financial results. NCR’s management evaluates the company’s results excluding certain items, such as pension expense, to assess the financial performance of the company and believes this information is useful for investors because it provides a more complete understanding of NCR’s underlying operational performance, as well as consistency and comparability with past reports of financial results. In addition, management uses certain of these measures to manage and determine effectiveness of its business managers and as a basis for incentive compensation. These non-GAAP measures should not be considered as substitutes for or superior to results determined in accordance with GAAP.
(2) The segment results included in Schedule B and non-GAAP income from operations (non-pension operating income) and non-GAAP earnings per share discussed in this earnings release exclude the impact of pension expense and certain items. Due to the significant change in its pension expense from year to year and the non-operational nature of pension expense and these special items, NCR’s management uses non-pension operating expense and non-GAAP earnings per share to evaluate year-over-year operating performance. NCR may, in addition, segregate special items from its GAAP results from time to time to reflect the ongoing earnings per share performance of the company. NCR also uses non-pension operating income and non-GAAP earnings per share to manage and determine the effectiveness of its business managers and as a basis for incentive compensation. NCR determines non-pension operating income based on its GAAP income (loss) from operations excluding pension expense and special items. These non-GAAP measures should not be considered as substitutes for or superior to results determined in accordance with GAAP.
(3) Free cash flow does not have a uniform definition under GAAP and, therefore, NCR’s definition may differ from other companies’ definitions of this measure. NCR defines free cash flow as net cash provided by/used in operating activities and cash flow provided by/used in discontinued operations less capital expenditures for property, plant and equipment, and additions to capitalized software. 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. This non-GAAP measure should not be considered a substitute for or superior to cash flows from operating activities determined in accordance with GAAP.
Note to investors - This news release contains forward-looking statements, including statements as to anticipated or expected results, beliefs, opinions and future financial performance, within the meaning of Section 21E of the Securities and Exchange Act of 1934. Forward-looking statements include projections of revenue, profit growth and other financial items, and future economic performance, among other things. These forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties that could cause NCR’s actual results to differ materially.
In addition to the factors discussed in this release, other risks and uncertainties include those relating to: the uncertain economic climate, which could impact the ability of our customers to make capital expenditures, thereby affecting their ability to purchase our products, and consolidation in the financial services sector, which could impact our business by reducing our customer base; the timely development, production or acquisition and market acceptance of new and existing products and services (such as self-service technologies), including our ability to accelerate market acceptance of new products and services; shifts in market demands, continued competitive factors and pricing pressures and their impact on our ability to improve gross margins and profitability, especially in our more
mature offerings; the effect of currency translation; short product cycles, rapidly changing technologies and maintaining a competitive leadership position with respect to our solution offerings; tax rates; ability to execute our business and reengineering plans; turnover of workforce and the ability to attract and retain skilled employees, especially in light of continued cost-control measures being taken by the company; availability and successful exploitation of new acquisition and alliance opportunities; access to DVD inventory and the conversion to, and market adoption of, alternative methods of entertainment content delivery; changes in Generally Accepted Accounting Principles (GAAP) and the resulting impact, if any, on the company’s accounting policies; continued efforts to establish and maintain best-in-class internal information technology and control systems; the success of our pension strategy; compliance with requirements relating to data privacy and protection; expected benefits related to the Radiant Systems, Inc. (“Radiant”) transaction not materializing as expected; the Radiant transaction not being timely completed, if completed at all; prior to the completion of the Radiant transaction, Radiant’s business experiencing disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, licensees, or other business partners; the NCR and Radiant being unable to successfully implement integration strategies; and other factors detailed from time to time in the company’s U.S. Securities and Exchange Commission reports and the company’s annual reports to stockholders. 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.
Schedule A
NCR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in millions, except per share amounts)
| For the Periods Ended June 30 | ||||||||||||||||
| Three Months | Six Months | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenue |
||||||||||||||||
| Products |
$ | 650 | $ | 587 | $ | 1,144 | $ | 1,055 | ||||||||
| Services |
662 | 589 | 1,263 | 1,150 | ||||||||||||
| Total revenue |
1,312 | 1,176 | 2,407 | 2,205 | ||||||||||||
| Cost of products |
526 | 463 | 930 | 846 | ||||||||||||
| Cost of services |
516 | 472 | 997 | 927 | ||||||||||||
| Total gross margin |
270 | 241 | 480 | 432 | ||||||||||||
| % of Revenue |
20.6 | % | 20.5 | % | 19.9 | % | 19.6 | % | ||||||||
| Selling, general and administrative expenses |
181 | 171 | 345 | 341 | ||||||||||||
| Research and development expenses |
42 | 39 | 82 | 78 | ||||||||||||
| Income from operations |
47 | 31 | 53 | 13 | ||||||||||||
| % of Revenue |
3.6 | % | 2.6 | % | 2.2 | % | 0.6 | % | ||||||||
| Interest expense |
(1 | ) | — | (1 | ) | (1 | ) | |||||||||
| Other (expense) income, net |
(1 | ) | — | 5 | 1 | |||||||||||
| Total other (expense) income, net |
(2 | ) | — | 4 | — | |||||||||||
| Income before income taxes and discontinued operations |
45 | 31 | 57 | 13 | ||||||||||||
| % of Revenue |
3.4 | % | 2.6 | % | 2.4 | % | 0.6 | % | ||||||||
| Income tax expense |
8 | 11 | 9 | 10 | ||||||||||||
| Income from continuing operations |
37 | 20 | 48 | 3 | ||||||||||||
| (Loss) income from discontinued operations, net of tax |
(2 | ) | 11 | 1 | 11 | |||||||||||
| Net income |
35 | 31 | 49 | 14 | ||||||||||||
| Net income attributable to noncontrolling interests |
2 | — | 3 | 2 | ||||||||||||
| Net income attributable to NCR |
$ | 33 | $ | 31 | $ | 46 | $ | 12 | ||||||||
| Amounts attributable to NCR common stockholders: |
||||||||||||||||
| Income from continuing operations |
$ | 35 | $ | 20 | $ | 45 | $ | 1 | ||||||||
| (Loss) income from discontinued operations, net of tax |
(2 | ) | 11 | 1 | 11 | |||||||||||
| Net income |
$ | 33 | $ | 31 | $ | 46 | $ | 12 | ||||||||
| Net income per share attributable to NCR common stockholders: |
||||||||||||||||
| Net income per common share from continuing operations |
||||||||||||||||
| Basic |
$ | 0.22 | $ | 0.12 | $ | 0.28 | $ | 0.01 | ||||||||
| Diluted |
$ | 0.22 | $ | 0.12 | $ | 0.28 | $ | 0.01 | ||||||||
| Net income per common share |
||||||||||||||||
| Basic |
$ | 0.21 | $ | 0.19 | $ | 0.29 | $ | 0.07 | ||||||||
| Diluted |
$ | 0.21 | $ | 0.19 | $ | 0.29 | $ | 0.07 | ||||||||
| Weighted average common shares outstanding |
||||||||||||||||
| Basic |
157.8 | 160.4 | 158.5 | 160.1 | ||||||||||||
| Diluted |
160.7 | 161.6 | 161.2 | 161.3 | ||||||||||||
Schedule B
NCR CORPORATION
CONSOLIDATED REVENUE and OPERATING INCOME SUMMARY
(Unaudited)
(in millions)
| For the Periods Ended June 30 | ||||||||||||||||||||||||
| Three Months | Six Months | |||||||||||||||||||||||
| 2011 | 2010 | % Change |
2011 | 2010 | % Change |
|||||||||||||||||||
| Revenue by segment |
||||||||||||||||||||||||
| Financial Services |
$ | 729 | $ | 632 | 15 | % | $ | 1,321 | $ | 1,205 | 10 | % | ||||||||||||
| Retail and Hospitality |
449 | 438 | 3 | % | 825 | 796 | 4 | % | ||||||||||||||||
| Entertainment |
38 | 23 | 65 | % | 75 | 41 | 83 | % | ||||||||||||||||
| Emerging Industries |
96 | 83 | 16 | % | 186 | 163 | 14 | % | ||||||||||||||||
| Total revenue |
$ | 1,312 | $ | 1,176 | 12 | % | $ | 2,407 | $ | 2,205 | 9 | % | ||||||||||||
| Operating income by segment |
||||||||||||||||||||||||
| Financial Services |
$ | 77 | $ | 75 | $ | 124 | $ | 108 | ||||||||||||||||
| % of Revenue |
10.6 | % | 11.9 | % | 9.4 | % | 9.0 | % | ||||||||||||||||
| Retail and Hospitality |
22 | 15 | 33 | 20 | ||||||||||||||||||||
| % of Revenue |
4.9 | % | 3.4 | % | 4.0 | % | 2.5 | % | ||||||||||||||||
| Entertainment |
(17 | ) | (10 | ) | (32 | ) | (22 | ) | ||||||||||||||||
| % of Revenue |
(44.7 | %) | (43.5 | %) | (42.7 | %) | (53.7 | %) | ||||||||||||||||
| Emerging Industries |
19 | 8 | 33 | 25 | ||||||||||||||||||||
| % of Revenue |
19.8 | % | 9.6 | % | 17.7 | % | 15.3 | % | ||||||||||||||||
| Subtotal-segment operating income |
$ | 101 | $ | 88 | $ | 158 | $ | 131 | ||||||||||||||||
| % of Revenue |
7.7 | % | 7.5 | % | 6.6 | % | 5.9 | % | ||||||||||||||||
| Pension expense |
53 | 50 | 104 | 106 | ||||||||||||||||||||
| Other adjustments (1) |
1 | 7 | 1 | 12 | ||||||||||||||||||||
| Total income from operations |
$ | 47 | $ | 31 | $ | 53 | $ | 13 | ||||||||||||||||
| (1) | Other adjustments include $1 million of acquisition related costs for the three and six months ended June 30, 2011 and $7 million and $12 million of incremental costs directly related to the relocation of the Company’s worldwide headquarters for the three and six months ended June 30, 2010, respectively. |
Schedule C
NCR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions, except per share amounts)
| June 30 2011 |
March 31 2011 |
December 31 2010 |
||||||||||
| Assets |
||||||||||||
| Current assets |
||||||||||||
| Cash and cash equivalents |
$ | 457 | $ | 480 | $ | 496 | ||||||
| Accounts receivable, net |
980 | 946 | 928 | |||||||||
| Inventories, net |
810 | 793 | 741 | |||||||||
| Other current assets |
328 | 349 | 313 | |||||||||
| Total current assets |
2,575 | 2,568 | 2,478 | |||||||||
| Property, plant and equipment, net |
453 | 434 | 429 | |||||||||
| Goodwill |
115 | 116 | 115 | |||||||||
| Prepaid pension cost |
325 | 314 | 286 | |||||||||
| Deferred income taxes |
628 | 624 | 630 | |||||||||
| Other assets |
408 | 416 | 423 | |||||||||
| Total assets |
$ | 4,504 | $ | 4,472 | $ | 4,361 | ||||||
| Liabilities and stockholders’ equity |
||||||||||||
| Current liabilities |
||||||||||||
| Short-term borrowings |
$ | 1 | $ | 1 | $ | 1 | ||||||
| Accounts payable |
548 | 540 | 499 | |||||||||
| Payroll and benefits liabilities |
171 | 150 | 175 | |||||||||
| Deferred service revenue and customer deposits |
396 | 424 | 362 | |||||||||
| Other current liabilities |
402 | 389 | 379 | |||||||||
| Total current liabilities |
1,518 | 1,504 | 1,416 | |||||||||
| Long-term debt |
10 | 10 | 10 | |||||||||
| Pension and indemnity plan liabilities |
1,279 | 1,278 | 1,259 | |||||||||
| Postretirement and postemployment benefits liabilities |
304 | 312 | 309 | |||||||||
| Income tax accruals |
136 | 138 | 165 | |||||||||
| Environmental liabilities |
221 | 237 | 244 | |||||||||
| Other liabilities |
40 | 43 | 42 | |||||||||
| Total liabilities |
3,508 | 3,522 | 3,445 | |||||||||
| Stockholders’ equity |
||||||||||||
| NCR stockholders’ equity: |
||||||||||||
| Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding at June 30, 2011, March 31, 2011 and December 31, 2010, respectively |
— | — | — | |||||||||
| Common stock: par value $0.01 per share, 500.0 shares authorized, 157.2, 158.5, and 159.7 shares issued and outstanding at June 30, 2011, March 31, 2011, and December 31, 2010, respectively |
2 | 2 | 2 | |||||||||
| Paid-in capital |
239 | 261 | 281 | |||||||||
| Retained earnings |
1,981 | 1,948 | 1,935 | |||||||||
| Accumulated other comprehensive loss |
(1,263 | ) | (1,296 | ) | (1,335 | ) | ||||||
| Total NCR stockholders’ equity |
959 | 915 | 883 | |||||||||
| Noncontrolling interests in subsidiaries |
37 | 35 | 33 | |||||||||
| Total stockholders’ equity |
996 | 950 | 916 | |||||||||
| Total liabilities and stockholders’ equity |
$ | 4,504 | $ | 4,472 | $ | 4,361 | ||||||
Schedule D
NCR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in millions)
| For the Periods Ended June 30 | ||||||||||||||||
| Three Months | Six Months | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Operating activities |
||||||||||||||||
| Net income |
$ | 35 | $ | 31 | $ | 49 | $ | 14 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||
| Loss (income) from discontinued operations |
2 | (11 | ) | (1 | ) | (11 | ) | |||||||||
| Depreciation and amortization |
38 | 33 | 75 | 65 | ||||||||||||
| Stock-based compensation expense |
8 | 7 | 15 | 9 | ||||||||||||
| Excess tax benefit from stock-based compensation |
— | — | (1 | ) | — | |||||||||||
| Deferred income taxes |
(9 | ) | (15 | ) | (14 | ) | (5 | ) | ||||||||
| Gain on sale of property, plant, and equipment |
(1 | ) | — | (3 | ) | — | ||||||||||
| Changes in assets and liabilities: |
||||||||||||||||
| Receivables |
(40 | ) | 23 | (58 | ) | 35 | ||||||||||
| Inventories |
(17 | ) | (9 | ) | (69 | ) | (43 | ) | ||||||||
| Current payables and accrued expenses |
35 | 37 | 49 | 1 | ||||||||||||
| Deferred service revenue and customer deposits |
(28 | ) | (30 | ) | 34 | 17 | ||||||||||
| Employee severance and pension |
21 | 23 | 54 | 60 | ||||||||||||
| Other assets and liabilities |
20 | (2 | ) | (22 | ) | (33 | ) | |||||||||
| Net cash provided by operating activities |
64 | 87 | 108 | 109 | ||||||||||||
| Investing activities |
||||||||||||||||
| Grant reimbursements from capital expenditures |
— | 3 | — | 4 | ||||||||||||
| Expenditures for property, plant and equipment |
(42 | ) | (41 | ) | (67 | ) | (80 | ) | ||||||||
| Proceeds from sales of property, plant and equipment |
— | — | 2 | — | ||||||||||||
| Additions to capitalized software |
(15 | ) | (15 | ) | (29 | ) | (28 | ) | ||||||||
| Net cash used in investing activities |
(57 | ) | (53 | ) | (94 | ) | (104 | ) | ||||||||
| Financing activities |
||||||||||||||||
| Purchase of Company common stock |
(35 | ) | — | (70 | ) | — | ||||||||||
| Excess tax benefit from stock-based compensation |
— | — | 1 | — | ||||||||||||
| Short-term borrowings, net |
— | — | — | (4 | ) | |||||||||||
| Repayment of long-term debt |
— | (1 | ) | — | (1 | ) | ||||||||||
| Proceeds from employee stock plans |
7 | 1 | 13 | 3 | ||||||||||||
| Net cash used in financing activities |
(28 | ) | — | (56 | ) | (2 | ) | |||||||||
| Cash flows from discontinued operations |
||||||||||||||||
| Net cash (used in) provided by operating activities |
(7 | ) | 8 | (8 | ) | — | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents |
5 | (3 | ) | 11 | (7 | ) | ||||||||||
| (Decrease) increase in cash and cash equivalents |
(23 | ) | 39 | (39 | ) | (4 | ) | |||||||||
| Cash and cash equivalents at beginning of period |
480 | 408 | 496 | 451 | ||||||||||||
| Cash and cash equivalents at end of period |
$ | 457 | $ | 447 | $ | 457 | $ | 447 | ||||||||
Exhibit 99.2
Key Media Messages – TRADE MEDIA
NCR
| • | We are bringing together two great companies that complement each other and have little overlap, creating new opportunities for employees, customers and partners. |
| • | Radiant has a strong software business with SaaS/subscription delivery capability across hospitality and specialty retail and this is growing rapidly. This complements our software business and we also expect to see some integration opportunities that will be worked out as we integrate the solution portfolio across the two companies. |
| • | With the addition of Radiant Systems, NCR will create a third core industry vertical, after its Financial and Retail lines of business, and establish category leadership in the hospitality and specialty retail markets. The hospitality and specialty retail total addressable market is approximately $8 billion in size and is under-penetrated by industry leaders. |
| • | Radiant Systems is a leading provider of multichannel point-of-sale and managed hosted service solutions to the hospitality and specialty retail segments. Radiant Systems’ market-leading software and Software as a Service (SaaS) capabilities will significantly enhance NCR’s multi-channel solutions, creating a superior portfolio of point-of–service and self-service solutions. |
| • | NCR will use its global sales, services and operations organizations to extend this portfolio to many of the fastest-growing markets in the world, while driving supply chain, operational and innovation synergies. |
| • | Market coverage will be enhanced by Radiant Systems’ strong channel partner network, which will complement NCR’s channel and support its goal of building a world-class channel partner network. |
| • | NCR plans to leverage Radiant Systems’ leadership position in quick service and table service restaurants, specialty and convenience retailers and entertainment venues by combining Radiant Systems’ solution and services portfolio with NCR’s existing portfolio, brand and global reach. |
Radiant
| • | Radiant Systems’ growth strategy has always focused on taking great care of our customers, delivering leading innovation to our industries and continuing to expand our market presence across our industries and around the globe. |
| • | This combination dramatically accelerates our capabilities on all of these initiatives. |
| • | NCR’s global footprint, brand recognition and track record of innovation will help us achieve our strategic aspirations and create even more value for our customers. |
| • | Importantly, both NCR and Radiant Systems share a vision that these accomplishments start with a common ingredient—great people to execute on the vision. |
Key Media Q&A
Can you tell me more about Radiant?
Founded in 1985, Radiant is a $350 million business providing leading point-of sale and operations management and marketing solutions for the hospitality/restaurant, convenience store, cinema, specialty retail, and stadium industry in North America, Asia Pacific, Latin America, and Europe. Radiant is headquartered in Atlanta, GA, with key offices in Texas, California and Tennessee within the U.S. and offices in the UK, Austria, Czech Republic, Australia, and Singapore. Radiant has more than 1,500 global employees and a large global, channel partner network.
With more than 100,000 active installations worldwide, Radiant’s solution offerings include point-of-sale hardware and software; mobile point-of-sale solutions; software subscription services supported by a SaaS business model; as well as support, maintenance, and professional services. Radiant is a leader in their markets, serving six of the top 10 fastest growing chains in quick service, table service and fast/casual restaurants. Their customer base also includes four international oil companies and six of the top 10 theatre chains. Some of Radiant’s customers include Chick-fil-A, Dunkin Brands, Chipotle, PF Chang’s, Macaroni Grill, BP, Shell, ExxonMobil, Phillips Arena, Live Nation, and AMC Theatres.
Who are Radiant’s customers?
With more than 100,000 active installations worldwide, Radiant provides systems to the Hospitality, Petroleum & Convenience Retail, Retail, and Sports & Entertainment segments. In fact, Radiant has been the #1 provider for the hospitality industry since 2004, serving six of the top 10 fastest growing chains in quick services, table service and fast/casual restaurants. Customers include Chick-fil-a, Dunkin Donuts, Chipotle, California Pizza Kitchen, and Burger King, to name a few. Their customer base also includes four international oil companies, including Shell and ExxonMobil, and six of the top 10 theatre circuits.
How many employees does Radiant have?
Radiant has more than 1,500 global employees and a large global, channel partner network.
Why is NCR acquiring Radiant Systems?
The acquisition of Radiant Systems bolsters NCR’s commitment to expand in our core retail and hospitality business. With this acquisition, we will immediately become a leader in the hospitality and specialty retail segments. Radiant’s combined targeted hospitality and retail markets will expand NCR’s total available market by approximately $8 billion. Our companies are very synergistic and, combined, we will be positioned to offer our customers an enhanced portfolio of point-of-sale and multichannel self-service solutions with a best-in-class global customer service organization. Following the acquisition, NCR will have the scale and presence in a third core industry vertical and can leverage Radiant’s software and SaaS capabiities into other LoBs, while Radiant Systems will be positioned to accelerate its international growth through NCR’s global brand and footprint.
Where are Radiant’s facilities?
Radiant has locations in North America, Asia Pacific, Latin America, and Europe.
What percentage of Radiant’s sales come from overseas?
Radiant’s international business is approximately 15 percent of their business today.
NCR is in Hospitality today; what’s going to be different? Will the product lines be integrated?
This acquisition enables NCR to expand our global offerings to our existing customer base and strengthen our presence in a number of countries. So not only are we bringing in additional solution offerings and addressing new segments, but we are also bringing in a wealth of talent that strengthens our expertise and servicing capability. After the transaction closes, we will assess the details on how the combined portfolio can leverage the best of both companies to enhance our offerings to you.
Does Radiant Systems compete with NCR today?
While we both serve this segment, we have generally focused on different types of hospitality customers.
Why did you decide to focus on the hospitality industry now?
Hospitality is an important and strategic growth market for NCR and we look forward to building on Radiant’s leadership position, while offering customers NCR’s existing portfolio of solutions.
Which Radiant solutions will NCR keep and which will be discontinued?
Radiant’ solutions are mainly complementary in nature focused more on specialty and convenience while we’ve traditionally been stronger with mass merch, big box, grocery and other chains. We will asses how we integrate solutions as we move through the integration process.
Is NCR planning to keep the Radiant brand or will there be a rebranding process in the future?
At this time, there are no plans to eliminate Radiant’s brands, but we recognize this deal affords Radiant the opportunity to leverage NCR’s brand and global reach. During the integration process, we will evaluate the most effective brand strategy that will enable us to achieve our goals with this line of business.
How will Radiant Systems fit into the new combined organization?
Radiant Systems employees are highly valued and important to the long term success of NCR. The acquisition of Radiant Systems solidifies NCR’s commitment to the Hospitality and Specialty Retail industries worldwide. Once the transaction is completed, NCR will create a new line of business, led by Andy Heyman. This transaction will establish the Hospitality and Specialty Retail vertical as NCR’s third largest industry, after its financial and retail lines of business. Andy will report to NCR’s CEO, Bill Nuti.
What new products does this combination bring?
Among others, the Radiant Systems Hospitality portfolio includes additional offerings in back office, SaaS software offerings such as loyalty, stored value and payment as well as opening up the Table Serve Restaurant market with new solutions, including tableside mobile capability.
On the specialty retail side, there is expanded capacity to serve Petroleum and Convenience Retail given Radiant Systems’ broad convenience, fuel controlling, and ticketing kiosk solutions. In the Specialty Retail Markets, there is a full suite addressing the small and medium business customer across number specialty retail verticals.
If I am a customer of both companies, what changes will I see?
Until the transaction closes, you will not see any changes. It will be business as usual. We will work with you after the transaction to discuss any changes.
Who are Radiant’s channel partners and are these separate from NCR’s?
Radiant has about 770 partners, accounting for approximately 35% of its business. This acquisition is a visible demonstration of our commitment to our channel partners and enables us to accelerate the growth of your business. Radiant’s channel ecosystem was a significant factor in shaping NCR’s interest in the company.
Will Radiant’s channel partners be moved to NCR’s partner program?
Our plan at this time is to keep the channels separate, but we will look for opportunities to apply best practices across NCR and Radiant.
Does this acquisition present any channel conflicts?
This deal brings together two leading technology companies in the retail and hospitality space, creating tremendous opportunity for our customers, partners, employees and shareholders. While both companies have an extensive customer base, our offerings complement each other, and we do not anticipate any channel conflicts.
Can NCR partners sell the Radiant Systems portfolio?
Until the transaction closes, nothing changes. After closing, we expect that, in the short term, partners will continue to focus within their existing solution set and territory but we do see opportunities in the future. Details on how to expand your portfolio will be announced following the close of the transaction.
Will this acquisition increase the competition for partners in markets?
Because there is minimal overlap in of customer and channel coverage, we do not anticipate significant marketplace changes.
How will the two companies be managed from a customer perspective?
At this time, the deal is pending regulatory approval and we will continue to operate as two independent companies until the deal closes. The account teams that support you today will continue to be there for you and will keep you informed throughout the transition.
When do you expect the transaction to close?
Pending regulatory approval, we anticipate closing sometime in the third quarter of this year. Until the transaction closes, both companies will continue to operate as two independent entities.
How long do you expect the integration process to take?
We are bringing together two great companies that complement one another and have little overlap, creating new opportunities for employees, customers, and partners. It is difficult to put a firm date on the length of the integration process, as these transitions take time, and we are committed to ensuring a seamless transition for everyone. We will create teams with individuals from both organizations to support change management efforts and develop and execute specific integration plans.
In your recent analyst call, NCR said that it may sell its Entertainment business. What else can you tell me about those plans?
NCR Entertainment continues to grow. We’re adding new retail partners and adding new features to our rental experience, such as a mobile rental experience and the expansion of our Hot Titles program. In connection with the announcement of the Radiant acquisition, our CEO stated that we are considering strategic options for the Entertainment business and have been approached by interested parties. These alternatives include a wide variety of options, including new strategic partnerships. At the moment, we are not focusing on any specific
option but we continue to evaluate and pursue the best alternative for that business, our customers, NCR and our shareholders. We remain focused on operating our kiosks under the BLOCKBUSTER Express brand, and we continue to grow that business – renting more movies to consumers and adding kiosks at new retail partners.
But selling the business is one of those options, correct?
We have been approached by interested parties and are looking at a variety of options, including new strategic partnerships. We are not focusing on any specific option and we continue to evaluate and pursue the best alternative for that business, our customers, NCR and our shareholders. Our focus is on providing a great rental experience, and we continue to grow NCR Entertainment with new consumer offers and new retail partners.
What will happen to Radiant Systems’ leadership team?
Radiant Systems brings an experienced leadership team with expertise that has helped establish Radiant Systems as the leading provider of technology solutions in the Retail and Hospitality markets. We anticipate the majority of Radiant Systems leadership will join NCR. Radiant Systems’ Andy Heyman will become head of the newest NCR vertical, reporting to NCR’s CEO, Bill Nuti.
The press release mentions Andrew Heyman, but not John Heyman. Will John be joining NCR?
As part of this transaction, John Heyman will not be joining NCR.
Are you planning to cut jobs at Radiant?
We will be implementing a broad range of cost synergy opportunities to help us reduce operating costs, including saving approximately 20-30 million in pre-tax cost savings as we eliminate Radiant’s public reporting requirements. These programs also include the applications of NCR’s continuous improvement programs, like value engineering, our design for serviceability effort, and Lean Six Sigma. We do anticipate that some redundancies are inevitable, but at this point it is too early in the process to provide further details.
Will Radiant’s manufacturing facilities remain?
At this time, there are no plans to close any manufacturing facilities.
What is Radiant’s software capability and how will this be integrated with NCRs?
Radiant has a strong software business with SaaS/subscription delivery capability across hospitality and specialty retail and this is growing rapidly. This complements our software business and we also expect to see some integration opportunities that will be worked out as we integrate the solution portfolio across the two companies.
How will Radiant’s SaaS platform be extended across NCR’s business and how will this integrate with NCR’s existing SaaS platform.
It is too early to say, and this is something we will assess as we integrate our capabilities. The architecture that the Radiant team has built is highly aligned with the way in which we built our e-commerce platforms, in both the private and public cloud space.
Which of Radiant’s solutions are most relevant for NCR’s fast growing geographical markets?
We believe many of their solutions can be leveraged by NCR’s global sales and channel partner network.
The planned tender offer described in these materials has not yet commenced. This description is not an offer to buy or the solicitation of an offer to sell securities. At the time the planned tender offer is commenced, NCR Corporation will file a tender offer statement on Schedule TO with the Securities and Exchange Commission (the “SEC”), and Radiant Systems will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the planned tender offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other tender offer documents) and the solicitation/recommendation statement will contain important information that should be read carefully before making any decision to tender securities in the planned tender offer. Those materials will be made available to Radiant Systems’ shareholders at no expense to them. In addition, all of those materials (and all other tender offer documents filed with the SEC) will be made available at no charge on the SEC’s website: www.sec.gov.