NCR Corporation (NYSE:NCR) Q4 2018 Earnings Conference Call Transcript

Feb 07, 2019 • 04:30 pm ET

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NCR Corporation (NYSE:NCR) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, and welcome to the NCR Corporation Fourth Quarter Fiscal Year 2018 Earnings Conference. Today's conference is being recorded.

At this time, I would like to turn the conference over to Mr. Michael Nelson, Vice President of Investor Relations. Please go ahead, sir.

Executive
Michael G. Nelson

Good afternoon, and thank you for joining our fourth quarter and full year earnings call. Joining me on the call today are Mike Hayford, President and CEO; Owen Sullivan, COO; and Andre Fernandez, CFO.

Before we get started, let me remind you that our presentation and discussions will include forward-looking statements. These statements reflect our current expectations and beliefs, but they're subject to risks and uncertainties that could cause actual results to differ materially from those expectations. These risks and uncertainties are described in our earnings release and our periodic filings with the SEC, including our annual report.

On today's call, we will also be discussing certain non-GAAP financial measures. These non-GAAP measures are described and reconciled to their GAAP counterparts in the presentation materials, the press release dated February 7, 2019, and on the Investor Relations page of our website. A replay of this call will be available later today on our website, ncr.com.

With that, I would now like to turn the call over to Mike.

Executive
Michael Hayford

Thanks, Michael, and thank you for joining us today for our fourth quarter and full year 2018 earnings call. I will begin with some of my views on the business before turning it over to Andre, who will review our fourth quarter and full year 2018 financial performance as well as discuss our outlook for 2019. Then Owen, Andre and I will take your questions.

I'll begin on Slide 3 with my thoughts on not just the fourth quarter, but also the last nine months I've spent as CEO and where NCR is as we enter 2019. The fourth quarter was in line with our expectations, while the full year was within the guidance range we provided on our second quarter earnings call. The results demonstrate the progress we are making improving our execution and stabilizing our business. As I've stated in the past, our primary goal in 2018 was: to take care of our customers, to improve execution around our new product introductions and begin to build a stronger and more efficient NCR.

The fourth quarter included some highlights that show the success we're having executing our strategy and laying the groundwork for improved performance in the years ahead. First, our services business continues to generate improved margins via the ongoing implementation of our transformation initiatives. Second, we grew our recurring revenue in the quarter and for the full year. And third, our manufacturing network restructuring resulted in a significant ramp-up of hardware production and lower costs than in the third quarter.

As we previously discussed, in the second and third quarters, we experienced challenges with our hardware delivery, including supply chain issues with the rollout of our 80 Series ATMs, production manufacturing ramp-up at our outsource partners,