M & F Worldwide Corp. Reports Income for 2007 First Quarter
05 5월 2007 - 7:30AM
PR Newswire (US)
NEW YORK, May 4 /PRNewswire-FirstCall/ -- M & F Worldwide Corp.
(NYSE:MFW), today reported results for the first quarter ended
March 31, 2007. Net revenues in the first quarter of 2007 were
$191.3 million as compared to $187.2 million in the first quarter
of 2006. Operating income in the first quarter of 2007 was $31.5
million as compared to $33.2 million in the first quarter of 2006.
Net income in the first quarter of 2007 was $9.4 million as
compared to $10.4 million in the first quarter of 2006. Basic
earnings per common share were $0.45 in the first quarter of 2007
and $0.53 in the first quarter of 2006. Diluted earnings per common
share were $0.44 in the first quarter of 2007 and $0.52 in the
first quarter of 2006. Financial Institution Segment Net revenues
from the Financial Institution segment were $138.2 million in the
first quarter of 2007 as compared to $136.6 million in the first
quarter of 2006. This was primarily attributable to an increase in
revenues for a large client, partially offset by reduced spending
from some direct marketing customers. Operating income decreased
8.6% to $20.2 million as compared to $22.1 million in the first
quarter of 2006. The decrease in operating income was primarily
attributable to additional expense associated with various
incentive plans and restructuring expenses, partially offset by
cost reductions and a decrease in non-cash expenses related to fair
value adjustments to assets recorded as part of the acquisition of
Clarke American Corp. in December 2005. Such non-cash expenses
related to fair value adjustments to assets as part of the
acquisition were $6.5 million and $7.4 million, respectively, for
the three months ended March 31, 2007 and March 31, 2006. Direct to
Consumer Segment Net revenues from the Direct to Consumer segment
increased 0.4% to $26.4 million in the first quarter of 2007 as
compared to $26.3 million in the first quarter of 2006. This
improvement was driven by an increase in revenues per unit,
partially offset by a decline in unit volume. Operating income
increased to $3.2 million in the first quarter of 2007 as compared
to $3.0 million in the first quarter of 2006. This was attributable
mainly to decreases in non- cash expenses related to fair value
adjustments to assets as part of the acquisition of Clarke American
Corp. in December 2005. Licorice Products Segment Net revenues from
the Licorice Products segment increased by $2.4 million, or 9.9%,
to $26.7 million in the first quarter of 2007 from $24.3 million in
the first quarter of 2006. This increase was primarily due to an
increase in revenues to the worldwide tobacco industry of $0.6
million, an increase in Magnasweet and licorice derivative sales of
$0.3 million, an increase in sales to confectionary and other
customers of $0.2 million and an increase in sales of raw materials
to Mafco Worldwide's joint venture in China of $1.3 million in the
first quarter of 2007 as compared to the first quarter of 2006.
Licorice extract sales to tobacco customers increased primarily as
a result of increased shipment volumes and the favorable effect of
Euro to U.S. dollar exchange rates, partially offset by a decline
in sales of non-licorice products. Magnasweet and licorice
derivative sales also increased primarily due to an increase in
shipment volumes. Operating income from the Licorice Products
segment increased by $1.2 million to $10.3 million in the first
quarter of 2007 from $9.1 million in the first quarter of 2006. The
increase was primarily attributable to the increase in sales and a
decrease in professional fees, partially offset by substantially
higher raw materials costs in the first quarter of 2007 as compared
to the first quarter of 2006. Harland Acquisition As previously
announced, on May 1, 2007, M & F Worldwide completed its
acquisition of John H. Harland Company ("Harland") at a price per
share of Harland common stock of $52.75, representing an
approximate transaction value of $1.7 billion. Upon the completion
of the transaction, Harland became a wholly owned subsidiary of
Clarke American Corp., subsequently renamed Harland Clarke Holdings
Corp. ("Harland Clarke"), which is a wholly owned subsidiary of M
& F Worldwide. In connection with the closing of the
transaction, Clarke American's outstanding senior secured credit
facility and Harland's outstanding credit facility were repaid in
full. In addition, approximately 99.9% of Clarke American's 11 3/4%
senior notes due 2013 were repaid. The acquisition and debt
repayment were funded with new borrowings by Harland Clarke,
consisting of a $1.8 billion senior secured term loan and an
aggregate $615.0 million principal amount of senior notes due 2015,
comprised of $310.0 million principal amount of 9 1/2% senior fixed
rate notes and $305.0 million principal amount of senior floating
rate notes bearing interest at LIBOR plus 4.75%. About M & F
Worldwide Until the closing of the acquisition of Harland on May 1,
2007, M & F Worldwide had two business lines operated by Clarke
American and Mafco Worldwide. Clarke American provided checks,
check-related products and direct marketing services through two
segments: the Financial Institution segment, which is focused on
financial institution clients and their customers, and the Direct
to Consumer segment, which is focused on individual customers.
Subsequent to the closing of the acquisition of Harland, Clarke
American's check printing, contact center and direct marketing
capabilities are being combined with Harland's corresponding
business and will operate under the name "Harland Clarke." As a
result of the acquisition of Harland, M & F Worldwide now has
four business lines, which are operated by Harland Clarke, Harland
Financial Solutions, Scantron and Mafco Worldwide. Mafco Worldwide
produces licorice products for sale to the tobacco, food,
pharmaceutical and confectionery industries (which is M & F
Worldwide's Licorice Products segment). The software operations of
Harland Financial Solutions include core processing, retail and
lending solutions as well as maintenance services to financial and
other institutions. Scantron is a leading provider of data
collection and testing and assessment products sold primarily to
the educational, financial institution and commercial markets. This
press release contains forward-looking statements, within the
meaning of the Private Securities Litigation Reform Act of 1995,
which involve risks and uncertainties. M & F Worldwide's actual
results may differ materially from those discussed in such
forward-looking statements. In addition to factors described in M
& F Worldwide's Securities and Exchange Commission filings and
others (including in the Risk Factors set forth in the Annual
Report on Form 10-K of M & F Worldwide filed with the
Securities and Exchange Commission on March 9, 2007), the following
factors could cause M & F Worldwide's actual results to differ
materially from those expressed in any forward-looking statements
made by M & F Worldwide: (a) economic, climatic or political
conditions in countries in which Mafco Worldwide sources licorice
root; (b) economic, regulatory or political conditions that have an
impact on the worldwide tobacco industry or on the consumption of
tobacco products in which licorice products are used; (c) the
failure of third parties to make full and timely payment to M &
F Worldwide for environmental, asbestos, tax and other matters for
which M & F Worldwide is entitled to indemnification; (d) the
maturity of the principal industry in which Clarke American and
Harland operate and trends in the paper check industry, including a
faster than anticipated decline in check usage due to increasing
use of alternative payment methods and other factors; (e)
consolidation among financial institutions and other adverse
changes among the large clients on which Clarke American and
Harland depend, resulting in decreased revenues; (f) the ability to
retain Clarke American's and Harland's clients; (g) the ability to
retain Clarke American's and Harland's key employees and
management; (h) lower than expected cash flow from operations; (i)
significant increases in interest rates; (j) unfavorable foreign
currency fluctuations; (k) M & F Worldwide's substantial
indebtedness; (l) variations in contemplated brand strategies,
business locations, management positions and other business
decisions after the closing of the acquisition; (m) our ability to
implement any or all components of our business strategy or realize
all of our expected cost savings or synergies from the Harland
acquisition; and (n) the acquisition of Harland otherwise not being
successful from a financial point of view, including, without
limitation, due to any difficulties with Harland Clarke Holdings
Corp. servicing its debt obligations. M & F Worldwide assumes
no responsibility to update the forward-looking statements
contained in this release. M & F Worldwide Corp. and
Subsidiaries Consolidated Statements of Income (in millions, except
per share data) (Unaudited) Three Months Ended March 31, 2007 2006
Net revenues $191.3 $187.2 Cost of revenues 115.9 112.6 Gross
profit 75.4 74.6 Selling, general and administrative expenses 43.9
41.4 Operating income 31.5 33.2 Interest income 0.8 0.5 Interest
expense (17.1) (16.7) Income before income taxes 15.2 17.0
Provision for income taxes 5.8 6.6 Net income $9.4 $10.4 Earnings
per common share: Basic $0.45 $0.53 Diluted $0.44 $0.52 M & F
Worldwide Corp. and Subsidiaries Business Segment Information (in
millions) (Unaudited) Three Months Ended March 31, 2007 2006 Net
revenues Financial Institution $138.2 $136.6 Direct to Consumer
26.4 26.3 Licorice Products 26.7 24.3 Corporate - - Operating
income (loss) Financial Institution $20.2 $22.1 Direct to Consumer
3.2 3.0 Licorice Products 10.3 9.1 Corporate (2.2) (1.0)
DATASOURCE: M & F Worldwide Corp. CONTACT: Christine Taylor, of
M & F Worldwide Corp., +1-212-572-5988
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