CANTON, Ohio – Diebold Inc. said yesterday it is suspending plans to build a $100 million headquarters in nearby Green, Ohio, and is forfeiting tens of millions in tax breaks that would have covered the entire cost of the 500,000-square-foot building and corporate campus.
The ATM maker said it is "instead focusing its resources and strategic direction on generating long-term, sustainable growth, using its assets to capitalize on acquisitive opportunities and invest in technologies and services that will help grow the business."
Yesterday’s news came as Diebold was announcing a 58% decline in third quarter earnings, with net income declining to $17.4 million, from $41.8 million for the same quarter last year. Diebold attributed the steep decline in third quarter earnings to declining profits in Brazil and a significant shift in revenue mix in North America.
Third quarter revenue growth was flat at just 0.1%, to $709.9 million.
For the first three quarters of the year Diebold reported an 8% rise in revenues to $2.15 billion, and a 33% surge in net income to $91.8 million.
Diebold agreed in April to stay in the Akron-Canton area after receiving a $56 million state incentive package of tax breaks, grants and loans designed to keep it from leaving for competing offers from North Carolina or Virginia. In addition to being offered the state package, the company also was supposed to receive about $44 million in tax-increment financing and other aid from the city of Green, Summit County, the Summit County Port Authority and DeHoff Development Co., which was expected to cover the entire $100 million cost of construction.
"As we've been analyzing our near- and long-term growth priorities, it has become clear that investing more than $100 million in a headquarters facility is not economically feasible given the other priorities for the business at this time," said Thomas Swidarski, Diebold president of Diebold. "We have tremendous opportunities for growth, both through acquisition and organic means," Swidarski continued. "Therefore, we must ensure that we maintain adequate capital flexibility to take advantage of these prospects that will position us for long-term growth."