Diebold, Incorporated (NYSE: DBD) today reported first quarter 2009 income from continuing operations attributable to Diebold of $4.4 million, or $.06 per share, down 70% and 73%, respectively, from the first quarter 2008. First quarter 2009 revenue was $663.2 million, down 4% from the first quarter 2008.
They started off their press release with this significant item
Diebold reached an agreement in principle with staff of SEC
And then went on to say “In addition, first quarter operating expenses benefited from a $10 million expense recovery accrual from one of the company's director and officer (D&O) insurance carriers related to legal and other expenses incurred as part of the government investigations, which was received April 17, 2009. The company continues to pursue reimbursement of the remaining incurred legal and other expenditures with its other D&O insurance carriers.”
They have wordsmith a governance problem into a financial triumph. The SEC starts an investigation, the company settles which seemed like the wise move and then they trigger insurance settlements under D&O policies. They also tell you that they are on the hunt for more D&O money making it sound like they have it figured out.
No information is provided about which directors or officers blemished their records or what the blemish is about or what governance procedures are being adjusted to avoid these problems in the future. But the investor should be happy to know that this really swell cost recovery exercise is underway and seems to be paying really good dividends.
Via Financial Skeptic:
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