On Monday, Diebold Incorporated (NYSE:DBD) reported its second quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Kartik Mehta – Northcoast Research: I wonder if you look at today the fundamentals in the ATM market; first is at the beginning of the year kind of worldwide what markets do you think are in line with what you expected, kind of better than what you expected, and maybe worse than what you expected?
Thomas W. Swidarski – President and CEO: Let me go by region, I’ll start with North America and I’d say North America is in line with what we expected. We knew coming out of the gate that the first quarter – we (didn’t know) maybe quite the sheer (size) the first quarter was going to be on the regional side, but we knew it was going to be very strong, so we saw little bit of the second quarter being pulled in as a result of the (ADA), the deadlines. But I’d say really both this year and kind of long-term sustainability, underlying factor at North America remain constant and we’re pretty bullish about that. When I look at EMEA, I would say EMEA overall you would say is probably little worse. As the year had gone on relative to some of the Western European countries and – so in our case while revenue, for instance, in the quarter was down and you’d say well that might be a negative impact for us, actually we swung the profitability because of the focus on specific countries there. So overall, I would say for us where we participate you’d say that that’s a pretty choppy market and it’s pretty volatile, but I would say that’s probably down a little from what we expected at the beginning of the year. When I look at Asia Pacific, I would say Asia Pacific is pretty close, maybe with the biggest movement in terms of being more positive than we thought in terms of India and what that can mean really for the outlying years in terms of the actions of the government there, because not too much with the state run banks but really that puts the private banks in a position to having play catch up, and so you have opportunities in both of those segments as that unfolds. So Asia Pacific probably is maybe going to be a little better than we thought at the beginning of the year, and I think the remainder would be Latin America and Brazil, and for us I would say in the self-service piece certainly if I strip out Brazil voting, the voting piece was different than we expected as I explained. But on the self-service side I’d have to say very strong and maybe even a little better than we thought at the beginning of the year.
Kartik Mehta – Northcoast Research: And then Tom, you talked a little bit about India and how the market is changing there. From a growth perspective, what would you expect the growth rates for that country to be from ATM side over the next couple years?
Thomas W. Swidarski – President and CEO: Kartik, I think from our standpoint the big pieces there have to do really with the managed services sides of things. So when you start taking a look, if you’re going to look at just the unit count, it’s a pretty growth, but the pricing on that is pretty low and how you participate that’s a little different. So, for us, I would say it should be a double digit growth environment for us in India, with a lot of emphasis on service and services, and that really plays into kind of what we think our strength, what we’ve built there within the Indian market. Certainly, as you’ve seen the dynamics are changing very quickly, we’ll know a whole lot more in the next three to four months how things shake out, but we feel pretty good about what’s happening there from a macro level standpoint.
Kartik Mehta – Northcoast Research: Then just one final question Tom in Brazil, there were talks in the marketplace that maybe Bank Itau was going to put out an RFP and I am wondering to the extent that you can talk about it, has that RFP been placed and have they determined who is going to supply the ATMs?
Thomas W. Swidarski – President and CEO: I think (indiscernible) standpoint that they have been pretty public in terms of looking to have a second supplier there. As many know that Bank Itau is one of the best banks in the world and certainly from the statute standpoint, but also in terms of a performance standpoint within Brazil and Latin America and they have been captive really to Itau Tech which is their – was a wholly owned subsidiary there from a technology standpoint. So they are the sole provider in terms of ATMs. They changed really approaches here this year and fortunately for us, we did win an order from the bank. We’ve been in the process of working with them and when I visited Brazil on my most recent trip, I had a chance to have several meetings both at the bank and at the technology show where we were at and had some long conversations there. So, I feel very good about our capabilities especially compared with what they are accustomed to. I think for us it will be a long relationship unfolding over many years, and the first pieces of the hurdle, you know you have to get through certification, you’ve got to go through all the internal hurdles you might imagine with the bank with 30,000 or 40,000 ATMs and the level of specification they have, but to-date, there are very positive in terms of kind of where we stood, the pace with which we are pushing them, not them pushing us and our ability to really not only get in there, but on really the hardware side, but on the services side as well, which is really key. So, we have some pilots going on, certainly from the technology standpoint, but more interesting to me, we’ve got a lot of pilots going on the services side, which I think is really encouraging because that gives you really the sustainability that you have versus you’re selling a piece of hardware. So, feel really good about that, and I think 2013 for us should shape up very nicely with the Banco Itau.
Matt Summerville – KeyBanc Capital Markets: Couple of questions, Brad, can you quantify, the hit you took on excess and out-of-fleet inventory and some of the investments you’re making in the fleet. What did all that sort of cost you in the quarter?
Bradley C. Richardson – EVP and CFO: Matt, I mean I think if you look at the overall margin performance and kind of the trend that we had been on, what I’d ask you to do is just kind of assume the trend that we have been on now again first quarter was maybe a little stronger than the historical trends but take that historical trend and then delta versus what we actually delivered and that’s really the impact.
Matt Summerville – KeyBanc Capital Markets: Then the level of investment you’re making in infrastructure around the integrated services organization, how long will these investments you’re making sort of suppress margin somewhat, if you will?
Bradley C. Richardson – EVP and CFO: I think again it’s implied in our guidance is that the margin performance for the service side of the business will be up from certainly the performance that we delivered in the second quarter because again at the high investments, those investments will continue for the rest of this year I think is a fair assumption. But again we’re guiding to relatively flat service margins. Again second half will be slightly – but it will still be burdened by some of this infrastructure investment as we formally launch the Toronto-Dominion contract.
Thomas W. Swidarski – President and CEO: And Matt (I’ll just make) one comment there. So our expectation is we would exit the year I should say in the fourth quarter north of 28% relative to the service margin. So I would say the second and third quarter would bear the biggest impact relative to the immediacy of the building of the infrastructure and if I explain that for a minutes, it’s basically because of the level of sophistication associated with Toronto-Dominion but also because of the growing book of business there, the decision we made was really to invest significantly, to have a capacity to allow us to expand kind of into the future. So I would call this a step function in investment. So it’s one that really should be able to carry us for several years after this and be cutting-edge and also give us again competitive advantage. So while it’s going to impact us I would say maybe materially in the second and third quarter in terms of margins, we will see sequential growth from this point in terms of margins and more importantly give us really good confidence in our ability to handle the increased volumes that we’re seeing and that Toronto-Dominion gets layered on, and the level of sophistication that we want to manage that business going forward.
Matt Summerville – KeyBanc Capital Markets: Tom, just one or two other things. Can you update us as to what the total contract value is that you have now just in the ATM business? You gave us the security business. And then can you also help us with how we should think about mix? You provided us a bridge essentially from Q1 to what you just reported in Q2 as we move from here to Q3 and Q4 on the product side obviously. How should we be thinking about mix relative to this quarter?
Thomas W. Swidarski – President and CEO: Matt, I’m sorry. Would you frame the first part of your question again? Were you talking about Toronto-Dominion or were you talking about something different?
Matt Summerville – KeyBanc Capital Markets: No, just the total ATM file value or integrated services backlog. It’s a number you’ve given before.
Thomas W. Swidarski – President and CEO: I think the contract value in the second quarter was about $100 million, total contract value, and the backlog now is getting close to $0.5 billion. So that would be the – and basically that’s spread over the three or four or five years of the value contract, what we haven’t revenued yet, that will revenue over that period of time for contracts we’ve already signed. Therein lies the issue relative to making sure we’ve got the right infrastructure in place to be able to put the kind of processes along with the technology in place to handle the volumes that we see coming down the pike here in 2013.
Matt Summerville – KeyBanc Capital Markets: Then just on the mix in the back half of the year?
Thomas W. Swidarski – President and CEO: Mix in the back half of the year, it would be – if you’re looking at North America, the mix clearly starts weighting towards the nationals and maybe that’s 55 – 60-40 national to regionals, and you see a higher mix of international as well.