NCR Announces Third Quarter 2021 Results
NCR Corporation reported strong financial results for Q3 2021, with revenue reaching $1.90 billion, a 20% year-over-year increase. Key highlights include a 39% growth in recurring revenue and a significant profit margin expansion, boosted by software and services. The company's adjusted EBITDA rose to 18.5%. However, net income fell to $12 million from $31 million due to extinguishment costs and increased tax expenses. Cash flow from operations improved, totaling $497 million, while free cash flow was $125 million.
- Revenue increased by 20%, reaching $1.90 billion.
- Recurring revenue grew by 39%, reflecting strong demand.
- Adjusted EBITDA margin expanded to 18.5%, a multi-year high.
- Cash flow from operations rose to $497 million, a significant year-over-year jump.
- Net income decreased from $31 million to $12 million due to higher income tax expense and extinguishment costs.
Revenue up
-
Revenue of
$1.90 billion 20% ; Recurring revenue growth of39% - Significant profit margin expansion driven by a favorable mix of revenue
-
Cash flow from operations of
$497 million $125 million -
GAAP diluted EPS of
$0.06 $0.69 - Acceleration across all strategic growth initiatives
“We delivered solid results in the third quarter with strong growth in recurring revenue streams, higher profitability, and consistent cash generation. Adjusted EBITDA expanded to a multi-year high of
In this release, we use certain non-GAAP measures. These non-GAAP measures include “free cash flow,” “adjusted EBITDA,” and others with the words “non-GAAP” 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.
Third Quarter 2021 Operating Results
On
Revenue
Third quarter revenue of
$ in millions |
Q3 2021 |
|
Q3 2020 |
|
% Increase
|
|||||
Banking |
$ |
1,050 |
|
|
$ |
777 |
|
|
35 |
% |
Retail |
553 |
|
|
556 |
|
|
(1 |
%) |
||
Hospitality |
223 |
|
|
173 |
|
|
29 |
% |
||
T&T |
75 |
|
|
83 |
|
|
(10 |
%) |
||
Total Revenue |
$ |
1,901 |
|
|
$ |
1,589 |
|
|
20 |
% |
|
|
|
|
|
|
|||||
Software & Services Revenue |
$ |
1,450 |
|
|
$ |
1,123 |
|
|
29 |
% |
Software & Services Revenue % |
76 |
% |
|
71 |
% |
|
|
|||
|
|
|
|
|
|
|||||
Recurring Revenue |
$ |
1,181 |
|
|
$ |
848 |
|
|
39 |
% |
Recurring Revenue % |
62 |
% |
|
53 |
% |
|
|
|||
Note - The results of legacy Cardtronics have been included in the banking segment results. |
||||||||||
Banking revenue increased
Retail revenue decreased
Hospitality revenue increased
Gross Margin
Third quarter gross margin of
Operating Expenses
Third quarter operating expenses of
Operating Income
Third quarter income from operations of
Other Expense/Income
Third quarter other expense of
Income Tax Expense/Benefit
Third quarter income tax expense of
Net Income from Continuing Operations Attributable to NCR
Third quarter net income from continuing operations attributable to NCR of
Adjusted EBITDA
Third quarter adjusted EBITDA of
Cash Flow
Third quarter cash provided by operating activities of
Second Half 2021 Outlook
The company provided the following outlook in our Q2 earnings call on
-
Revenue of
$4.0 $4.1 billion -
Adjusted EBITDA to be
$700 $750 million -
Diluted non-GAAP earnings per share of
$1.30 $1.50 -
Free cash flow of
$325 $375 million
Considering both our results of the third quarter and the probability of continued global supply chain challenges, we expect to be at the lower end of these guided ranges.
With respect to our Adjusted EBITDA and non-GAAP diluted earnings per share guidance, we do not provide a reconciliation to the respective GAAP measures because we are unable to predict with reasonable certainty the reconciling items that may affect GAAP net income from continuing operations and GAAP earnings per share 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.
Impact from COVID-19
We continue to navigate through the challenging times presented by COVID-19 with a sharp focus on safeguarding our employees, helping our customers and managing impacts on our supply chain. Despite the unprecedented environment, our teams are executing at a high level and we are advancing our strategy.
The COVID-19 pandemic is complex and continues to evolve. While it is difficult to project the long-term impact of the pandemic, we expect it will negatively impact our business at least in the short-term. The ultimate impact on our overall financial condition and operating results will depend on the currently unknowable duration and severity of the pandemic, supply chain challenges and cost escalations including materials, labor and freight, and any additional governmental and public actions taken in response. We continue to evaluate the long-term impact that COVID-19 may have on our business model. There can be no assurance that the measures we have taken or will take will completely offset the negative impact of COVID-19.
2021 Third Quarter Earnings Conference Call
A conference call is scheduled for today at
More information on NCR’s third quarter earnings, including additional financial information and analysis, is available on NCR’s Investor Relations website at http://investor.ncr.com/.
About
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,” “proposed,” “objective,” “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 NCR’s expansion, acceleration, and execution of our strategy to shift to a software platform and payments company and our NCR-as-a-Service and 80/60/20 strategy, statements regarding our financial position, expectations regarding delivery of increased value to customers and customer satisfaction, expectations regarding growth and long-term value creation for our stockholders, statements regarding momentum and continued investment in strategic growth platforms, expectations regarding the impact of the Cardtronics acquisition on NCR, statements regarding our plans to manage our business through the COVID-19 pandemic including safeguarding our employees, helping our customers, and managing impacts on our supply chain the expected impact of the COVID-19 pandemic on our business, expectations regarding demand for our products and services, statements regarding supply chain challenges and cost escalations including materials, labor and freight, statements regarding our second half 2021 financial outlook including revenue, adjusted EBITDA, earnings per share and free cash flow, statements regarding our focus on capitalization of opportunities, the integration of Cardtronics and opportunities to accelerate profitable growth, acceleration of payments and transaction processing solutions, allocation of capital and return on investment, and customer satisfaction. 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: the impact of the coronavirus (COVID-19) pandemic on our supply chain costs, including but not limited to, materials, labor and freight, business, financial condition and results of operations; domestic and global economic and credit conditions including, in particular, political, consumer, and unemployment conditions, the imposition or threat of protectionist trade policies or import or export tariffs, global and regional market conditions and spending trends, new tax legislation across multiple jurisdictions, modified or new global or regional trade agreements, execution of the United Kingdom’s exit from the
Non-GAAP Financial Measures
Non-GAAP Financial Measures. While NCR reports its results in accordance with Generally Accepted Accounting Principles in
Non-GAAP Diluted Earnings Per Share (EPS), Gross Margin (non-GAAP), Gross Margin Rate (non-GAAP), Operating Expenses (non-GAAP), Operating Income (non-GAAP), Operating Margin Rate (non-GAAP), Other (Expense) (non-GAAP), Income Tax Expense (non-GAAP), Effective Income Tax Rate (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 expenses (non-GAAP), operating income (non-GAAP), operating margin rate (non-GAAP), other (expense) (non-GAAP), income tax expense (non-GAAP), effective income tax rate (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 and transformation and restructuring activities, from NCR’s GAAP earnings per share, gross margin, gross margin rate, expenses, income from operations, operating margin rate, other (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.
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 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 restructuring charges, 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.
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, less the impact from the initial sale of trade accounts receivables under the agreement entered into during the 3rd quarter of 2021, 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.
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, 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 |
Q3 2021 |
|
Q3 2020 |
||||
Gross Margin (GAAP) |
$ |
520 |
|
|
$ |
427 |
|
Transformation and restructuring costs |
3 |
|
|
14 |
|
||
Acquisition-related amortization of intangibles |
23 |
|
|
5 |
|
||
Gross Margin (Non-GAAP) |
$ |
546 |
|
|
$ |
446 |
|
Reconciliation of Gross Margin Rate (GAAP) to Gross Margin Rate (Non-GAAP) |
|||||
|
Q3 2021 |
|
Q3 2020 |
||
Gross Margin Rate (GAAP) |
27.4 |
% |
|
26.9 |
% |
Transformation and restructuring costs |
0.1 |
% |
|
0.9 |
% |
Acquisition-related amortization of intangibles |
1.2 |
% |
|
0.3 |
% |
Gross Margin Rate (Non-GAAP) |
28.7 |
% |
|
28.1 |
% |
Reconciliation of Operating Expenses (GAAP) to Operating Expenses (Non-GAAP) |
|||||||||
$ in millions |
Q3 2021 |
|
Q3 2020 |
||||||
Operating Expenses (GAAP) |
$ |
363 |
|
|
|
$ |
309 |
|
|
Transformation and restructuring costs |
(2 |
) |
|
|
(5 |
) |
|
||
Acquisition-related amortization of intangibles |
(22 |
) |
|
|
(16 |
) |
|
||
Acquisition-related costs |
(8 |
) |
|
|
— |
|
|
||
Operating Expenses (Non-GAAP) |
$ |
331 |
|
|
|
$ |
288 |
|
|
Reconciliation of Income from Operations (GAAP) to Operating Income (Non-GAAP) |
|||||||
$ in millions |
Q3 2021 |
|
Q3 2020 |
||||
Income (Loss) from Operations (GAAP) |
$ |
157 |
|
|
$ |
118 |
|
Transformation and restructuring costs |
5 |
|
|
19 |
|
||
Acquisition-related amortization of intangibles |
45 |
|
|
21 |
|
||
Acquisition-related costs |
8 |
|
|
— |
|
||
Operating Income (Non-GAAP) |
$ |
215 |
|
|
$ |
158 |
|
Reconciliation of Other (Expense) (GAAP) to Other (Expense) (Non-GAAP) |
|||||||||
$ in millions |
Q3 2021 |
|
Q3 2020 |
||||||
Other Income (Expense) (GAAP) |
$ |
(115 |
) |
|
|
$ |
(86 |
) |
|
Acquisition-related cost |
1 |
|
|
|
— |
|
|
||
Debt extinguishment |
42 |
|
|
|
20 |
|
|
||
Debt refinancing |
1 |
|
|
|
— |
|
|
||
Other Income (Expense) (Non-GAAP) |
$ |
(71 |
) |
|
|
$ |
(66 |
) |
|
Reconciliation of Income Tax (Benefit) Expense (GAAP) to Income Tax Expense (Non-GAAP) |
|||||||
$ in millions |
Q3 2021 |
|
Q3 2020 |
||||
Income Tax (Benefit) Expense (GAAP) |
$ |
29 |
|
|
$ |
— |
|
Transformation and restructuring costs |
— |
|
|
5 |
|
||
Acquisition-related amortization of intangibles |
10 |
|
|
4 |
|
||
Acquisition-related costs |
1 |
|
|
— |
|
||
Debt Refinancing |
1 |
|
|
5 |
|
||
Income Tax Expense (Non-GAAP) |
$ |
41 |
|
|
$ |
14 |
|
Reconciliation of Net Income from Continuing Operations Attributable to NCR (GAAP) to
|
||||||||
$ in millions |
Q3 2021 |
|
Q3 2020 |
|||||
Net Income (Loss) from Continuing Operations Attributable to NCR (GAAP) |
$ |
12 |
|
|
$ |
31 |
|
|
Transformation and restructuring costs |
5 |
|
|
19 |
|
|
||
Acquisition-related amortization of intangibles |
45 |
|
|
21 |
|
|
||
Acquisition-related costs |
9 |
|
|
— |
|
|
||
Depreciation and amortization (excluding acquisition-related amortization of intangibles) |
104 |
|
|
70 |
|
|
||
Loss on Debt Extinguishment |
42 |
|
|
20 |
|
|
||
Interest expense |
68 |
|
|
60 |
|
|
||
Interest income |
— |
|
|
(3 |
) |
|
||
Income tax expense (benefit) |
29 |
|
|
— |
|
|
||
Stock-based compensation expense |
38 |
|
|
31 |
|
|
||
Adjusted EBITDA (Non-GAAP) |
$ |
352 |
|
|
$ |
249 |
|
|
Reconciliation of Diluted Earnings Per Share from Continuing Operations (GAAP) to Non-GAAP Diluted Earnings Per Share from Continuing Operations (Non-GAAP) |
|||||||
|
Q3 2021 |
|
Q3 2020 |
||||
Diluted Earnings Per Share (GAAP) (1) |
$ |
0.06 |
|
|
$ |
0.19 |
|
Transformation and restructuring costs |
0.03 |
|
|
0.10 |
|
||
Acquisition-related amortization of intangibles |
0.24 |
|
|
0.12 |
|
||
Acquisition-related costs |
0.05 |
|
|
— |
|
||
Debt extinguishment |
0.28 |
|
|
0.10 |
|
||
Debt refinancing |
0.01 |
|
|
|
0.00 |
|
|
Diluted Earnings Per Share (Non-GAAP) (1) |
$ |
0.69 |
|
|
$ |
0.54 |
|
(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 |
Q3 2021 |
|
Q3 2020 |
||||||
Net cash provided by (used in) operating activities |
$ |
497 |
|
|
|
$ |
212 |
|
|
Total capital expenditures |
(102 |
) |
|
|
(60 |
) |
|
||
Restricted cash settlement activity |
— |
|
|
|
3 |
|
|
||
Initial sale of Trade Accounts Receivable |
(274 |
) |
|
|
— |
|
|
||
Pension contributions |
4 |
|
|
|
5 |
|
|
||
Free cash flow |
$ |
125 |
|
|
|
$ |
160 |
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in millions, except per share amounts) |
|||||||||||||||
Schedule A
|
|||||||||||||||
|
For the Periods Ended |
||||||||||||||
|
Three Months |
|
Nine Months |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenue |
|
|
|
|
|
|
|
||||||||
Product |
$ |
520 |
|
|
$ |
521 |
|
|
$ |
1,553 |
|
|
$ |
1,476 |
|
Service |
1,381 |
|
|
1,068 |
|
|
3,569 |
|
|
3,100 |
|
||||
Total Revenue |
1,901 |
|
|
1,589 |
|
|
5,122 |
|
|
4,576 |
|
||||
Cost of products |
429 |
|
|
452 |
|
|
1,290 |
|
|
1,254 |
|
||||
Cost of services |
952 |
|
|
710 |
|
|
2,442 |
|
|
2,126 |
|
||||
Total gross margin |
520 |
|
|
427 |
|
|
1,390 |
|
|
1,196 |
|
||||
% of Revenue |
27.4 |
% |
|
26.9 |
% |
|
27.1 |
% |
|
26.1 |
% |
||||
Selling, general and administrative expenses |
294 |
|
|
254 |
|
|
835 |
|
|
743 |
|
||||
Research and development expenses |
69 |
|
|
55 |
|
|
204 |
|
|
169 |
|
||||
Income (loss) from operations |
157 |
|
|
118 |
|
|
351 |
|
|
284 |
|
||||
% of Revenue |
8.3 |
% |
|
7.4 |
% |
|
6.9 |
% |
|
6.2 |
% |
||||
Loss on extinguishment of debt |
(42 |
) |
|
(20 |
) |
|
(42 |
) |
|
(20 |
) |
||||
Interest expense |
(68 |
) |
|
(60 |
) |
|
(174 |
) |
|
(167 |
) |
||||
Other expense, net |
(5 |
) |
|
(6 |
) |
|
(23 |
) |
|
(10 |
) |
||||
Total other expense, net |
(115 |
) |
|
(86 |
) |
|
(239 |
) |
|
(197 |
) |
||||
Income (loss) from continuing operations before income taxes |
42 |
|
|
32 |
|
|
112 |
|
|
87 |
|
||||
% of Revenue |
2.2 |
% |
|
2.0 |
% |
|
2.2 |
% |
|
1.9 |
% |
||||
Income tax expense (benefit) |
29 |
|
|
— |
|
|
77 |
|
|
(33 |
) |
||||
Income (loss) from continuing operations |
13 |
|
|
32 |
|
|
35 |
|
|
120 |
|
||||
Loss from discontinued operations, net of tax |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Net income (loss) |
13 |
|
|
32 |
|
|
35 |
|
|
120 |
|
||||
Net income (loss) attributable to noncontrolling interests |
1 |
|
|
1 |
|
|
2 |
|
|
2 |
|
||||
Net income (loss) attributable to NCR |
$ |
12 |
|
|
$ |
31 |
|
|
$ |
33 |
|
|
$ |
118 |
|
Amounts attributable to NCR common stockholders: |
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations |
$ |
12 |
|
|
$ |
31 |
|
|
$ |
33 |
|
|
$ |
118 |
|
Dividends on convertible preferred stock |
(4 |
) |
|
(6 |
) |
|
(12 |
) |
|
(19 |
) |
||||
Income (loss) from continuing operations attributable to NCR common stockholders |
8 |
|
|
25 |
|
|
21 |
|
|
99 |
|
||||
Loss from discontinued operations, net of tax |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Net income (loss) attributable to NCR common stockholders |
$ |
8 |
|
|
$ |
25 |
|
|
$ |
21 |
|
|
$ |
99 |
|
Income (loss) per share attributable to NCR common stockholders: |
|
|
|
|
|
|
|
||||||||
Income (loss) per common share from continuing operations |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.06 |
|
|
$ |
0.19 |
|
|
$ |
0.16 |
|
|
$ |
0.77 |
|
Diluted (1) |
$ |
0.06 |
|
|
$ |
0.19 |
|
|
$ |
0.15 |
|
|
$ |
0.76 |
|
Net income (loss) per common share |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.06 |
|
|
$ |
0.19 |
|
|
$ |
0.16 |
|
|
$ |
0.77 |
|
Diluted (1) |
$ |
0.06 |
|
|
$ |
0.19 |
|
|
$ |
0.15 |
|
|
$ |
0.76 |
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
||||||||
Basic |
131.5 |
|
|
128.5 |
|
|
130.8 |
|
|
128.2 |
|
||||
Diluted (1) |
137.8 |
|
|
129.7 |
|
|
137.1 |
|
|
129.8 |
|
||||
(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. |
REVENUE AND OPERATING INCOME SUMMARY (Unaudited) (in millions)
|
|||||||||||||||||||||
Schedule B |
|||||||||||||||||||||
|
For the Periods Ended |
||||||||||||||||||||
|
Three Months |
|
Nine Months |
||||||||||||||||||
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
||||||||||
Revenue by segment |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Banking |
$ |
1,050 |
|
|
$ |
777 |
|
|
35 |
% |
|
$ |
2,615 |
|
|
$ |
2,303 |
|
|
14 |
% |
Retail |
553 |
|
|
556 |
|
|
(1 |
)% |
|
1,661 |
|
|
1,511 |
|
|
10 |
% |
||||
Hospitality |
223 |
|
|
173 |
|
|
29 |
% |
|
617 |
|
|
502 |
|
|
23 |
% |
||||
T&T |
75 |
|
|
83 |
|
|
(10 |
)% |
|
229 |
|
|
260 |
|
|
(12 |
)% |
||||
Total Revenue |
$ |
1,901 |
|
|
$ |
1,589 |
|
|
20 |
% |
|
$ |
5,122 |
|
|
$ |
4,576 |
|
|
12 |
% |
Adjusted EBITDA by segment |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Banking |
$ |
242 |
|
|
$ |
144 |
|
|
|
|
$ |
547 |
|
|
$ |
414 |
|
|
|
||
Banking adjusted EBITDA margin % |
23.0 |
% |
|
18.5 |
% |
|
|
|
20.9 |
% |
|
18.0 |
% |
|
|
||||||
Retail |
70 |
|
|
81 |
|
|
|
|
235 |
|
|
167 |
|
|
|
||||||
Retail adjusted EBITDA margin % |
12.7 |
% |
|
14.6 |
% |
|
|
|
14.1 |
% |
|
11.1 |
% |
|
|
||||||
Hospitality |
35 |
|
|
24 |
|
|
|
|
90 |
|
|
46 |
|
|
|
||||||
Hospitality adjusted EBITDA margin % |
15.7 |
% |
|
13.9 |
% |
|
|
|
14.6 |
% |
|
9.2 |
% |
|
|
||||||
T&T |
10 |
|
|
10 |
|
|
|
|
29 |
|
|
28 |
|
|
|
||||||
T&T EBITDA margin % |
13.3 |
% |
|
12.0 |
% |
|
|
|
12.7 |
% |
|
10.8 |
% |
|
|
||||||
Corporate and Other |
(5 |
) |
|
(10 |
) |
|
|
|
(10 |
) |
|
(17 |
) |
|
|
||||||
Total adjusted EBITDA |
$ |
352 |
|
|
$ |
249 |
|
|
|
|
$ |
891 |
|
|
$ |
638 |
|
|
|
||
Total adjusted EBITDA margin % |
18.5 |
% |
|
15.7 |
% |
|
|
|
17.4 |
% |
|
13.9 |
% |
|
|
||||||
CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions, except per share amounts) |
|||||||||||
Schedule C
|
|||||||||||
|
|
|
|
|
|
||||||
Assets |
|
|
|
|
|
||||||
Current assets |
|
|
|
|
|
||||||
Cash and cash equivalents |
$ |
383 |
|
|
$ |
449 |
|
|
$ |
338 |
|
Accounts receivable, net of allowances of |
943 |
|
|
1,271 |
|
|
1,117 |
|
|||
Inventories |
747 |
|
|
695 |
|
|
601 |
|
|||
Restricted cash |
246 |
|
|
241 |
|
|
59 |
|
|||
Other current assets |
459 |
|
|
450 |
|
|
363 |
|
|||
Total current assets |
2,778 |
|
|
3,106 |
|
|
2,478 |
|
|||
Property, plant and equipment, net |
683 |
|
|
676 |
|
|
373 |
|
|||
|
4,515 |
|
|
4,520 |
|
|
2,837 |
|
|||
Intangibles, net |
1,373 |
|
|
1,420 |
|
|
532 |
|
|||
Operating lease assets |
423 |
|
|
439 |
|
|
344 |
|
|||
Prepaid pension cost |
209 |
|
|
209 |
|
|
199 |
|
|||
Deferred income taxes |
824 |
|
|
930 |
|
|
965 |
|
|||
Other assets |
784 |
|
|
763 |
|
|
686 |
|
|||
Total assets |
$ |
11,589 |
|
|
$ |
12,063 |
|
|
$ |
8,414 |
|
Liabilities and stockholders’ equity |
|
|
|
|
|
||||||
Current liabilities |
|
|
|
|
|
||||||
Short-term borrowings |
$ |
30 |
|
|
$ |
303 |
|
|
$ |
8 |
|
Accounts payable |
767 |
|
|
746 |
|
|
632 |
|
|||
Payroll and benefits liabilities |
378 |
|
|
347 |
|
|
268 |
|
|||
Contract liabilities |
540 |
|
|
572 |
|
|
507 |
|
|||
Settlement liabilities |
230 |
|
|
243 |
|
|
31 |
|
|||
Other current liabilities |
789 |
|
|
756 |
|
|
642 |
|
|||
Total current liabilities |
2,734 |
|
|
2,967 |
|
|
2,088 |
|
|||
Long-term debt |
5,534 |
|
|
5,668 |
|
|
3,270 |
|
|||
Pension and indemnity plan liabilities |
836 |
|
|
842 |
|
|
851 |
|
|||
Postretirement and postemployment benefits liabilities |
116 |
|
|
116 |
|
|
120 |
|
|||
Income tax accruals |
102 |
|
|
98 |
|
|
102 |
|
|||
Operating lease liabilities |
406 |
|
|
420 |
|
|
325 |
|
|||
Other liabilities |
399 |
|
|
521 |
|
|
334 |
|
|||
Total liabilities |
10,127 |
|
|
10,632 |
|
|
7,090 |
|
|||
Series A convertible preferred stock: par value |
274 |
|
|
273 |
|
|
273 |
|
|||
Stockholders' equity |
|
|
|
|
|
||||||
NCR stockholders' equity: |
|
|
|
|
|
||||||
Preferred stock: par value |
— |
|
|
— |
|
|
— |
|
|||
Common stock: par value |
1 |
|
|
1 |
|
|
1 |
|
|||
Paid-in capital |
511 |
|
|
461 |
|
|
368 |
|
|||
Retained earnings |
971 |
|
|
963 |
|
|
950 |
|
|||
Accumulated other comprehensive loss |
(300 |
) |
|
(271 |
) |
|
(271 |
) |
|||
Total NCR stockholders' equity |
1,183 |
|
|
1,154 |
|
|
1,048 |
|
|||
Noncontrolling interests in subsidiaries |
5 |
|
|
4 |
|
|
3 |
|
|||
Total stockholders' equity |
1,188 |
|
|
1,158 |
|
|
1,051 |
|
|||
Total liabilities and stockholders' equity |
$ |
11,589 |
|
|
$ |
12,063 |
|
|
$ |
8,414 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in millions) |
|||||||||||||||||||
Schedule D
|
|||||||||||||||||||
|
For the Periods Ended |
||||||||||||||||||
|
Three Months |
|
Nine Months |
||||||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||||||
Operating activities |
|
|
|
|
|
|
|
||||||||||||
Net income (loss) |
$ |
13 |
|
|
|
$ |
32 |
|
|
|
$ |
35 |
|
|
|
$ |
120 |
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||||||
Loss on debt extinguishment |
42 |
|
|
|
20 |
|
|
|
42 |
|
|
|
20 |
|
|
||||
Depreciation and amortization |
152 |
|
|
|
93 |
|
|
|
364 |
|
|
|
269 |
|
|
||||
Stock-based compensation expense |
38 |
|
|
|
31 |
|
|
|
119 |
|
|
|
76 |
|
|
||||
Deferred income taxes |
4 |
|
|
|
(16 |
) |
|
|
30 |
|
|
|
(46 |
) |
|
||||
Impairment of other assets |
— |
|
|
|
— |
|
|
|
— |
|
|
|
4 |
|
|
||||
Gain (loss) on disposal of property, plant and equipment |
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
||||
Changes in assets and liabilities: |
|
|
|
|
|
|
|
||||||||||||
Receivables |
318 |
|
|
|
13 |
|
|
|
240 |
|
|
|
266 |
|
|
||||
Inventories |
(84 |
) |
|
|
42 |
|
|
|
(165 |
) |
|
|
28 |
|
|
||||
Current payables and accrued expenses |
76 |
|
|
|
36 |
|
|
|
210 |
|
|
|
(194 |
) |
|
||||
Contract liabilities |
(38 |
) |
|
|
(50 |
) |
|
|
5 |
|
|
|
6 |
|
|
||||
Employee benefit plans |
(9 |
) |
|
|
12 |
|
|
|
(30 |
) |
|
|
9 |
|
|
||||
Other assets and liabilities |
(15 |
) |
|
|
(1 |
) |
|
|
(43 |
) |
|
|
(61 |
) |
|
||||
Net cash provided by operating activities |
497 |
|
|
|
212 |
|
|
|
807 |
|
|
|
495 |
|
|
||||
Investing activities |
|
|
|
|
|
|
|
||||||||||||
Expenditures for property, plant and equipment |
(38 |
) |
|
|
(5 |
) |
|
|
(68 |
) |
|
|
(23 |
) |
|
||||
Proceeds from sale of property, plant and equipment |
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
7 |
|
|
||||
Additions to capitalized software |
(64 |
) |
|
|
(55 |
) |
|
|
(174 |
) |
|
|
(177 |
) |
|
||||
Business acquisitions, net of cash acquired |
(2 |
) |
|
|
— |
|
|
|
(2,466 |
) |
|
|
(25 |
) |
|
||||
Purchases of short-term investments |
— |
|
|
|
(8 |
) |
|
|
(13 |
) |
|
|
(14 |
) |
|
||||
Proceeds from sales of short-term investments |
— |
|
|
|
9 |
|
|
|
14 |
|
|
|
20 |
|
|
||||
Other investing activities, net |
— |
|
|
|
(2 |
) |
|
|
(6 |
) |
|
|
(3 |
) |
|
||||
Net cash used in investing activities |
(103 |
) |
|
|
(61 |
) |
|
|
(2,712 |
) |
|
|
(215 |
) |
|
||||
Financing activities |
|
|
|
|
|
|
|
||||||||||||
Payments of senior unsecured notes |
(400 |
) |
|
|
(1,300 |
) |
|
|
(400 |
) |
|
|
(1,300 |
) |
|
||||
Payments on term credit facilities |
(1 |
) |
|
|
(3 |
) |
|
|
(106 |
) |
|
|
(7 |
) |
|
||||
Payments on revolving credit facilities |
(746 |
) |
|
|
(50 |
) |
|
|
(1,431 |
) |
|
|
(716 |
) |
|
||||
Borrowings on term credit facilities |
— |
|
|
|
1 |
|
|
|
1,505 |
|
|
|
4 |
|
|
||||
Borrowings on revolving credit facilities |
732 |
|
|
|
56 |
|
|
|
1,541 |
|
|
|
1,460 |
|
|
||||
Proceeds from issuance of senior unsecured notes |
— |
|
|
|
1,100 |
|
|
|
1,200 |
|
|
|
1,500 |
|
|
||||
Debt issuance costs and bridge commitment fees |
(1 |
) |
|
|
(13 |
) |
|
|
(52 |
) |
|
|
(21 |
) |
|
||||
Call premium paid on debt extinguishment |
(37 |
) |
|
|
(15 |
) |
|
|
(37 |
) |
|
|
(15 |
) |
|
||||
Cash dividend paid for Series A preferred shares dividends |
(3 |
) |
|
|
— |
|
|
|
(11 |
) |
|
|
(6 |
) |
|
||||
Repurchases of common stock |
— |
|
|
|
— |
|
|
|
— |
|
|
|
(41 |
) |
|
||||
Proceeds from employee stock plans |
15 |
|
|
|
3 |
|
|
|
33 |
|
|
|
12 |
|
|
||||
Tax withholding payments on behalf of employees |
(3 |
) |
|
|
(2 |
) |
|
|
(28 |
) |
|
|
(27 |
) |
|
||||
Net change in client funds obligations |
5 |
|
|
|
(3 |
) |
|
|
(3 |
) |
|
|
(6 |
) |
|
||||
Principal payments for finance lease obligations |
(5 |
) |
|
|
(3 |
) |
|
|
(13 |
) |
|
|
(9 |
) |
|
||||
Other financing activities |
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(1 |
) |
|
||||
Net cash provided by (used in) financing activities |
(445 |
) |
|
|
(230 |
) |
|
|
2,196 |
|
|
|
827 |
|
|
||||
Cash flows from discontinued operations |
|
|
|
|
|
|
|
||||||||||||
Net cash provided by (used in) discontinued operations |
(3 |
) |
|
|
(2 |
) |
|
|
(50 |
) |
|
|
4 |
|
|
||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
(8 |
) |
|
|
— |
|
|
|
(12 |
) |
|
|
(16 |
) |
|
||||
Increase (decrease) in cash, cash equivalents, and restricted cash |
(62 |
) |
|
|
(81 |
) |
|
|
229 |
|
|
|
1,095 |
|
|
||||
Cash, cash equivalents and restricted cash at beginning of period |
697 |
|
|
|
1,739 |
|
|
|
406 |
|
|
|
563 |
|
|
||||
Cash, cash equivalents, and restricted cash at end of period |
$ |
635 |
|
|
|
$ |
1,658 |
|
|
|
$ |
635 |
|
|
|
$ |
1,658 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20211026006209/en/
News Media Contact
212.589.8428
scott.sykes@ncr.com
Investor Contact
678.808.6995
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Source:
FAQ
What were NCR's Q3 2021 revenue results?
How much did NCR's recurring revenue grow in Q3 2021?
What was the adjusted EBITDA for NCR in Q3 2021?
What was NCR's net income in Q3 2021?
How did NCR perform in terms of cash flow in Q3 2021?
