1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT: July 16, 1997 NCR CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MARYLAND 001-00395 31-0387920 (STATE OR OTHER JURISDICTION OF (COMMISSION (I.R.S. EMPLOYER INCORPORATION) FILE NUMBER) IDENTIFICATION NO.) 1700 S. PATTERSON BLVD., DAYTON, OH 45479 (937) 445-5000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) 2 Item 5. Other Events The Registrant's news release dated July 16, 1997, with respect to its financial results for the quarter ended June 30, 1997, including condensed consolidated balance sheets as of June 30, 1997, and condensed consolidated statements of operations, consolidated revenue summary, and condensed consolidated statements of cash flows for the three months and six months ended June 30, 1997, is attached and incorporated herein by reference. Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NCR Corporation Date: July 18, 1997 By: /s/ JOHN L. GIERING -------------------------------------- John L. Giering, Senior Vice President and Chief Financial Officer NCR CORPORATION INVESTOR RELATIONS DEPARTMENT Tel: 937-445-5905 Fax: 937-445-5541 HTTP://WWW.NCR.COM NEWS RELEASE NCR REPORTS IMPROVED SECOND-QUARTER RESULTS DAYTON, Ohio - NCR Corporation reported a narrowed second-quarter loss of $4 million, or $.04 per share, compared to a loss of $18 million, or $.18 per share, in the year-earlier period. Revenue in the quarter declined two percent to $1.645 billion compared to $1.679 billion reported in the comparable period last year. On a local currency basis, however, revenue increased one percent. Gross margins declined in the quarter to 26.7 percent from 27.6 percent in the year-ago period. This quarter marked the sixth consecutive quarter of order increases on a year-over-year basis. Despite continued strength in the U. S. dollar versus major world currencies, total orders, on a reported basis, were up slightly. On a local currency basis, orders posted a mid-single-digit gain compared to last year's second quarter. "We are pleased with our progress, but not with our pace," said Lars Nyberg, NCR Chairman & CEO. "We have challenges in achieving our goals, but we remain optimistic 3 that we can show growth for the full-year in orders and revenue in our core businesses; an improvement in operating income; and an improvement in per-share results." "Our retail and financial businesses reported sizable improvement, and expenses remained under control during the quarter as we continued to make investments in research and development and sales training. We are focused on correcting the inefficiencies and leveraging the improvements," Nyberg said. ORDERS Total NCR orders were up slightly compared to last year's quarter, but on a local currency basis, orders posted a mid-single-digit gain. On a product basis, retail and financial systems posted order growth in the teens. Entry-level servers and PCs also posted double-digit order growth. Professional services posted a high-single-digit gain in orders. These gains were offset by declines in orders for computer systems. On a geographic basis, low-single-digit order gains were posted in the Americas and Europe/Middle East/Africa regions. All three regions posted higher orders on a local currency basis than in the comparable period last year. REVENUE Worldwide revenue was up one percent on a local currency basis, but was down two percent on a reported dollar basis. On a reported basis, revenue gains in retail products of 25 percent, financial products of 13 percent and professional services of 9 percent over the year-ago period were more than offset by revenue declines in computer systems, systemedia products and customer services. Revenue increased in the Asia/Pacific region but declined in both the Americas and Europe/Middle East Africa regions from the year-ago period. GROSS MARGINS Gross margins for NCR products and systems improved to 29.6 percent compared to 29.2 percent in the second quarter last year. Services gross margins declined by 2.6 percentage points because of lower reported revenues against a cost structure developed to support higher revenue levels. The combined effect was a 0.9 percent drop in overall gross margins compared to a year ago. EXPENSES Total expenses of $458 million were up modestly from the $453 million in the comparable period last year. Selling, general and administrative expenses increased due to 4 additional investments in the sales force while research and development expenses were flat at $96 million. INCOME TAXES Income tax expense in the quarter was $6 million compared to $22 million in the year-ago period. The reported tax rate in excess of the U. S. statutory rate is a function of NCR's generating taxable international profits and the inability to recognize tax benefits from domestic losses. BALANCE SHEET NCR ended the second quarter in a strong financial position with $1.156 billion in cash and short-term investments, debt of $92 million and total shareholders' equity of $1.430 billion. As of June 30, 1997, NCR employed 38,400 people worldwide, including contractors. NCR Corporation is a recognized world leader in data warehousing solutions; open high availability transaction processing systems; automated teller machines; scanners and point of sale terminals; service and support for transaction-based systems for the retail, financial, communications and other select markets. ### NOTE TO INVESTORS: This news release contains forward-looking statements, including statements as to anticipated or expected results, beliefs, opinions and future financial performance. 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 the timely development, production or acquisition, and market acceptance of new and existing products and services; shifts in market demands; continued competitive factors and pricing pressures; short product-cycles and rapidly changing technologies; turnover of sales force and the ability to attract and retained skilled employees; tax rates; general economic and business conditions; and other factors detailed from time to time in the company's Securities and Exchange Commission reports, including the Form 10 filed in November 1996, the Form 10-K for the year ended December 31, 1996, the Form 10-Q for the quarter ended March 31, 1997, and the company's annual report to stockholders for 1996. 5 - --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. 6 NCR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
For the Periods Ended June 30 ----------------------------- Three Months Six Months ------------ ---------- 1997 1996 1997 1996 ---- ---- ---- ---- REVENUES Sales $ 919 $ 937 $ 1,633 $ 1,812 Services 726 742 1,401 1,453 ------- ------- ------- ------- TOTAL REVENUES 1,645 1,679 3,034 3,265 Cost of sales 647 663 1,136 1,300 Cost of services 559 552 1,076 1,096 ------- ------- ------- ------- GROSS MARGIN 439 464 822 869 ------- ------- ------- ------- % of Revenue 26.7% 27.6% 27.1% 26.6% Selling, general, and administrative expenses 362 356 676 711 % of Revenue 22.0% 21.2% 22.3% 21.8% Research and development expenses 96 97 183 184 % of Revenue 5.8% 5.8% 6.0% 5.6% ------- ------- ------- ------- INCOME (LOSS) FROM OPERATIONS (19) 11 (37) (26) ------- ------- ------- ------- % of Revenue -1.2% 0.7% -1.2% -0.8% Interest expense 4 13 6 26 Other (income) expense, net (25) (6) (30) (3) ------- ------- ------- ------- INCOME (LOSS) BEFORE INCOME TAXES 2 4 (13) (49) ------- ------- ------- ------- % of Revenue 0.1% 0.2% -0.4% -1.5% Income tax expense 6 22 7 34 ------- ------- ------- ------- NET LOSS $ (4) $ (18) $ (20) $ (83) ======= ======= ======= ======= % of Revenue -0.2% -1.1% -0.7% -2.5% NET LOSS PER COMMON SHARE $ (0.04) $ (0.18) $ (0.20) $ (0.82) ======= ======= ======= ======= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (IN MILLIONS) 102.1 101.4 101.8 101.4 ======= ======= ======= ======= 7 NCR CORPORATION CONSOLIDATED REVENUE SUMMARY (Unaudited) (DOLLARS IN MILLIONS)
For the Periods Ended June 30 ----------------------------- Three Months Six Months ------------ ---------- 1997 1996 1997 1996 ---- ---- ---- ---- Retail Products $ 134 $ 107 $ 214 $ 195 Financial Products 278 246 449 441 Computer Products 259 318 504 602 PCs/Entry Level Server Products 114 112 199 271 Systemedia 129 142 248 272 Customer Support Services 531 550 1,030 1,084 Professional Services 164 150 305 284 Data Services 27 30 56 64 Other 9 24 29 52 --------- --------- -------- --------- Total Revenues $ 1,645 $ 1,679 $ 3,034 $ 3,265 ========= ========= ======== ========= 8 NCR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN MILLIONS)
June 30 March 31 December 31 1997 1997 1996 ---- ---- ---- (Unaudited) (Unaudited) ASSETS Current assets Cash and short-term investments $1,156 $1,133 $1,203 Accounts receivable, net 1,446 1,336 1,457 Inventories 517 535 439 Other current assets 244 257 219 ------ ------ ------ TOTAL CURRENT ASSETS 3,363 3,261 3,318 Property, plant, and equipment, net 1,146 1,143 1,207 Other assets 776 763 755 ------ ------ ------ TOTAL ASSETS $5,285 $5,167 $5,280 ====== ====== ====== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term borrowings $ 56 $ 44 $ 28 Accounts payable 303 314 352 Other current liabilities 1,581 1,584 1,587 ------ ------ ------ TOTAL CURRENT LIABILITIES 1,940 1,942 1,967 Long-term debt 36 44 48 Other long-term liabilities 1,879 1,860 1,869 ------ ------ ------ TOTAL LIABILITIES 3,855 3,846 3,884 TOTAL SHAREHOLDERS' EQUITY 1,430 1,321 1,396 ------ ------ ------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,285 $5,167 $5,280 ====== ====== ====== 9 NCR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (DOLLARS IN MILLIONS)
For the Periods Ended June 30 ----------------------------- Three Months Six Months ------------ ---------- 1997 1996 1997 1996 ---- ---- ---- ---- OPERATING ACTIVITIES Net Loss $ (4) $ (18) $ (20) $ (83) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 94 103 186 175 Changes in operating assets and liabilities Receivables (110) 208 11 733 Inventories 18 (5) (78) 61 Other 78 (237) (25) (537) ----- ----- ------- ----- NET CASH PROVIDED BY OPERATING ACTIVITIES 76 51 74 349 INVESTING ACTIVITIES Short-term investments, net (40) (9) (277) (17) Expenditures for service parts & property, plant, and equipment (101) (194) (149) (231) Other investing activities 9 25 15 18 ----- ----- ------- ----- NET CASH USED IN INVESTING ACTIVITIES (132) (178) (411) (230) FINANCING ACTIVITIES Short-term borrowings, net 12 12 28 (6) Long-term debt, net (8) (1) (12) (231) Transfers from AT&T, net -- 286 -- 595 Other financing activities 18 -- 18 -- ----- ----- ------- ----- NET CASH PROVIDED BY FINANCING ACTIVITIES 22 297 34 358 Effect of exchange rate changes on cash and cash equivalents 17 9 (21) (7) ----- ----- ------- ----- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (17) 179 (324) 470 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 856 605 1,163 314 ----- ----- ------- ----- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 839 $ 784 $ 839 $ 784 ===== ===== ======= =====