NEW YORK, Aug. 5 /PRNewswire-FirstCall/ -- M & F
Worldwide Corp. ("M & F Worldwide" or the "Company") (NYSE:
MFW) today reported results for the second quarter and six months
ended June 30, 2010.
Additionally, M & F Worldwide filed its quarterly report
on Form 10-Q with the Securities and Exchange Commission today.
M & F Worldwide will host a conference call to discuss its
second quarter 2010 results on August 11,
2010, at 9:00 a.m. (EDT).
The conference call will be accessible by dialing (800)
230-1085 in the United States and
(612) 288-0329 internationally. For those unable to listen
live, a replay of the call will be available by dialing (800)
475-6701 in the United States and
(320) 365-3844 internationally; Access Code: 165957. The
replay will be available from 11:00 a.m.
(EDT) Wednesday, August 11, 2010, through 11:59 p.m. (EDT) Wednesday, August 25, 2010.
Second Quarter 2010 Highlights
- Net revenues of $451.3 million,
down $0.6 million, or 0.1%, as
compared to the second quarter of 2009.
- Operating income of $79.5
million, up $9.5 million, or
13.6%, as compared to the second quarter of 2009.
- Net income of $29.8 million, up
$0.7 million, or 2.4%, as compared to
the second quarter of 2009. Net income for the second quarter
of 2009 includes the impact of an $8.9
million ($5.5 million after
tax) gain on early extinguishment of debt.
Second Quarter 2010 Performance
Consolidated Results
Consolidated net revenues decreased by $0.6 million, or 0.1%, to $451.3 million for the second quarter of 2010
from $451.9 million for the second
quarter of 2009. The decrease was primarily due to volume
declines at Harland Clarke and Scantron, partially offset by
revenues related to the SubscriberMail and Protocol IMS
acquisitions completed in the fourth quarter of 2009 at the Harland
Clarke segment, increased revenues per unit, and an increase in
shipment volumes of pure licorice derivatives at the Licorice
Products segment.
Operating income increased by $9.5
million, or 13.6%, to $79.5
million for the second quarter of 2010 from $70.0 million for the second quarter of 2009.
The increase was primarily due to a $6.6 million decrease in restructuring costs and
labor cost reductions resulting from restructuring activities.
These increases were partially offset by volume declines in
the Harland Clarke and Scantron segments, a $0.6 million non-cash asset impairment charge
related to facilities that are held for sale at the Harland Clarke
segment and a change in the mix of products sold resulting in lower
average revenues per unit and increased raw material costs as a
percentage of sales at the Licorice Products segment.
Net income increased by $0.7
million, or 2.4%, to $29.8
million for the second quarter of 2010 from $29.1 million for the second quarter of 2009.
The increase in net income was primarily due to improvements
in operating income, which increased $9.5
million ($5.8 million after
tax) and interest expense, which declined $5.4 million ($3.3
million after tax) as compared to the second quarter of
2009, partially offset by an $8.9
million ($5.5 million after
tax) gain on early extinguishment of debt related to the purchase
of $24.2 million principal amount of
Harland Clarke Holdings' Senior Notes for aggregate consideration
of $14.6 million in the second
quarter of 2009.
Adjusted EBITDA increased by $1.8
million, or 1.4%, to $127.7
million for the second quarter of 2010 from $125.9 million for the second quarter of 2009.
Adjusted EBITDA is a non-GAAP measure that is defined in the
footnotes to this release and reconciled to net income, the most
directly comparable GAAP measure, in the accompanying financial
tables.
Segment Results
Net revenues for the Harland Clarke segment increased by
$1.0 million, or 0.3%, to
$307.3 million for the second quarter
of 2010 from $306.3 million for the
second quarter of 2009. The increase was primarily due to the
acquisitions of SubscriberMail and Protocol IMS, revenues from the
addition of new clients, a one-time payment resulting from the loss
of a client, and increased revenues per unit. These increases were
partially offset by volume declines in check and related products
and other one-time nonrecurring items. Operating income for the
Harland Clarke segment increased by $14.0
million, or 26.8%, to $66.3
million for the second quarter of 2010 from $52.3 million for the second quarter of 2009.
The increase in operating income was primarily due to a
$9.5 million decrease in
restructuring costs, labor cost reductions resulting from
restructuring activities and the one-time payment resulting from
the loss of a client, partially offset by volume declines and a
$0.6 million non-cash asset
impairment charge related to facilities that are held for sale.
Operating income for the second quarters of 2010 and 2009
includes restructuring costs of $1.6
million and $11.1 million,
respectively.
Net revenues for the Harland Financial Solutions segment
increased by $0.4 million, or 0.6%,
to $70.1 million for the second
quarter of 2010 from $69.7 million
for the second quarter of 2009. Increases in maintenance
revenues, outsourced host processing revenues, early termination
fees and term license revenues were partially offset by decreases
in hardware sales and other license revenues. Operating
income for the Harland Financial Solutions segment increased by
$0.2 million, or 1.8%, to
$11.4 million for the second quarter
of 2010 from $11.2 million for the
second quarter of 2009. The increase in operating income was
primarily due to a decrease in compensation expense related to an
incentive agreement from an acquisition and a $0.6 million decrease in restructuring costs,
partially offset by increases in foreign currency transaction
losses, labor costs, and amortization expenses resulting from the
reclassification of the Harland Clarke tradename from an
indefinite-lived to a definite-lived intangible asset in the fourth
quarter of 2009. Operating income for the second quarter of
2010 includes charges of $0.4 million
for compensation expense related to an incentive agreement from an
acquisition and $0.2 million for
restructuring costs. Operating income for the second quarter
of 2009 includes charges of $1.1
million for compensation expense related to an incentive
agreement from an acquisition and $0.8
million for restructuring costs.
Net revenues for the Scantron segment decreased by $1.6 million, or 3.2%, to $49.1 million for the second quarter of 2010 from
$50.7 million for the second quarter
of 2009. The decrease was primarily due to declines in service
maintenance, hardware and forms revenues, partially offset by
increases in revenues from web-based products and services for the
education market and from sales of a newly introduced solution that
assists financial institutions with the implementation of recent
changes to federal regulations regarding overdraft services
provided to financial institution customers. Operating income
for the Scantron segment decreased by $4.9
million, or 73.1%, to $1.8
million for the second quarter of 2010 from $6.7 million for the second quarter of 2009.
The decrease in operating income was primarily due to a
$3.5 million increase in
restructuring costs, costs in connection with investments in growth
initiatives in 2010, and volume declines, partially offset by
decreases in integration expenses. Operating income for the
second quarters of 2010 and 2009 includes restructuring costs of
$5.2 million and $1.7 million, respectively.
Net revenues for the Licorice Products segment increased by
$2.5 million, or 9.8%, to
$28.0 million for the second quarter
of 2010 from $25.5 million for the
second quarter of 2009. Magnasweet and pure licorice
derivative sales increased by $2.0
million primarily due to an increase in shipment volumes of
pure licorice derivatives. Sales of licorice extract to the
worldwide tobacco industry increased by $0.9
million, primarily due to the timing of shipments during the
2010 period compared to the 2009 period. Sales of licorice extract
to non-tobacco customers decreased by $0.4
million primarily due to the unfavorable impact of the U.S.
dollar translation of Mafco Worldwide's Euro denominated sales
related to the stronger dollar in the 2010 period versus the 2009
period. Operating income for the Licorice Products segment
decreased by $0.7 million, or 8.9%,
to $7.2 million for the second
quarter of 2010 from $7.9 million for
the second quarter of 2009. The decrease in operating income
was primarily due to a change in the mix of products sold resulting
in lower average revenues per unit and increased raw material costs
as a percentage of sales.
First Half 2010 Performance
Consolidated Results
Consolidated net revenues decreased by $7.7 million, or 0.8%, to $908.5 million for the first half of 2010 from
$916.2 million for the first half of
2009. The decrease was primarily due to volume declines at Harland
Clarke and Scantron, partially offset by revenues related to the
SubscriberMail and Protocol IMS acquisitions and increased revenues
per unit at the Harland Clarke segment and to an increase in
shipment volumes of pure licorice derivatives at the Licorice
Products segment.
Operating income increased by $29.2
million, or 21.1%, to $167.5
million for the first half of 2010 from $138.3 million for the first half of 2009.
The increase was primarily due to a $14.5 million decrease in restructuring costs,
labor cost reductions resulting from restructuring activities, and
increased revenues per unit in the Harland Clarke segment.
These increases were partially offset by volume declines in
the Harland Clarke and Scantron segments, a $0.6 million non-cash asset impairment charge
related to facilities that are held for sale at the Harland Clarke
segment and a change in the mix of products sold resulting in lower
average revenues per unit and increased raw material costs as a
percentage of sales at the Licorice Products segment.
Net income decreased by $17.0
million, or 21.1%, to $63.4
million for the first half of 2010 from $80.4 million for the first half of 2009.
The decrease in net income was primarily due to a
$61.5 million ($38.0 million after tax) gain on early
extinguishment of debt related to the purchase of $114.7 million principal amount of Harland Clarke
Holdings' Senior Notes for aggregate consideration of $49.7 million in the first half of 2009.
The decrease in net income was partially offset by
improvements in operating income, which increased $29.2 million ($17.8
million after tax), and interest expense, which declined
$13.4 million ($8.2 million after tax), as compared to the first
half of 2009.
Adjusted EBITDA increased by $12.0
million, or 4.8%, to $260.2
million for the first half of 2010 from $248.2 million for the first half of 2009.
Adjusted EBITDA is a non-GAAP measure that is defined in the
footnotes to this release and reconciled to net income, the most
directly comparable GAAP measure, in the accompanying financial
tables.
Segment Results
Net revenues for the Harland Clarke segment decreased by
$4.4 million, or 0.7%, to
$617.0 million for the first half of
2010 from $621.4 million for the
first half of 2009. The decrease was primarily due to volume
declines in check and related products and one-time nonrecurring
items, partially offset by the SubscriberMail and Protocol IMS
acquisitions, revenues from the addition of new clients, increased
revenues per unit, and a one-time payment resulting from the loss
of a client. Operating income for the Harland Clarke segment
increased by $28.7 million, or 27.8%,
to $131.9 million in the 2010 period
from $103.2 million in the 2009
period. The increase in operating income was primarily due to
a $15.1 million decrease in
restructuring costs, labor cost reductions resulting from
restructuring activities, increased revenues per unit, and the
one-time payment resulting from the loss of a client, partially
offset by volume declines and a $0.6
million non-cash asset impairment charge related to
facilities that are held for sale. Operating income for the
first half of 2010 and 2009 includes restructuring costs of
$3.3 million and $18.4 million, respectively.
Net revenues for the Harland Financial Solutions segment
increased by $0.5 million, or 0.4%,
to $139.4 million for the first half
of 2010 from $138.9 million for the
first half of 2009. Increases in maintenance revenues, outsourced
host processing revenues, early termination fees and term license
revenues were partially offset by decreases in hardware sales and
other license revenues. Operating income for the Harland
Financial Solutions segment increased by $4.2 million, or 22.6%, to $22.8 million in the 2010 period from
$18.6 million in the 2009 period.
The increase in operating income was primarily due to a
$2.8 million decrease in
restructuring costs, a decrease in compensation expense related to
an incentive agreement from an acquisition, labor costs reductions
resulting from restructuring activities, and increased revenues,
partially offset by increases in amortization expenses resulting
from the reclassification of the Harland Clarke tradename from an
indefinite-lived to a definite-lived intangible asset in the fourth
quarter of 2009, selling expenses, and foreign currency transaction
losses. Operating income for the first half of 2010 includes
charges of $0.8 million for
compensation expense related to an incentive agreement from an
acquisition and $0.4 million for
restructuring costs. Operating income for the first half of
2009 includes charges of $2.1 million
for compensation expense related to an incentive agreement from an
acquisition and $3.2 million for
restructuring costs.
Net revenues for the Scantron segment decreased by $4.9 million, or 4.7%, to $100.2 million for the first half of 2010 from
$105.1 million for the first half of
2009. The decrease was primarily due to declines in service
maintenance, forms and hardware revenues, partially offset by
increases in revenues from web-based products and services for the
education market and from sales of a newly introduced solution that
assists financial institutions with the implementation of recent
changes to federal regulations regarding overdraft services
provided to financial institution customers. Operating income
for the Scantron segment decreased by $2.4
million, or 17.8%, to $11.1
million in the 2010 period from $13.5
million in the 2009 period. The decrease in operating
income was primarily due to a $3.4
million increase in restructuring costs, costs in connection
with investments in growth initiatives in 2010, and volume
declines, partially offset by decreases in integration expenses.
Operating income for the first half of 2010 and 2009 includes
restructuring costs of $6.5 million
and $3.1 million, respectively.
Net revenues for the Licorice Products segment increased by
$4.0 million, or 7.8%, to
$55.2 million for the first half of
2010 from $51.2 million for the first
half of 2009. Magnasweet and pure licorice derivative sales
increased by $2.7 million primarily
due to an increase in shipment volumes of pure licorice
derivatives. Sales of licorice extract to non-tobacco customers
increased by $1.3 million primarily
due to an increase in shipment volumes to confectionary customers
and the favorable impact of the U.S. dollar translation of Mafco
Worldwide's Euro denominated sales due to the weaker dollar in the
2010 period versus the 2009 period. Sales of licorice extract to
the worldwide tobacco industry were unchanged in the 2010 period
compared to the 2009 period. Operating income for the
Licorice Products segment decreased by $2.2
million, or 13.5%, to $14.1
million in the 2010 period from $16.3
million in the 2009 period. The decrease in operating
income was primarily due to a change in the mix of products sold
resulting in lower average revenues per unit and increased raw
material costs as a percentage of sales.
About M & F Worldwide
M & F Worldwide has four business segments, which are
operated by Harland Clarke, Harland Financial Solutions, Scantron
and Mafco Worldwide. Harland Clarke is a provider of checks
and related products, direct marketing services and customized
business and home office products. Harland Financial
Solutions provides technology products and related services to
financial institutions. Scantron is a leading provider of
data management solutions and related services to educational,
healthcare, commercial and governmental entities. Mafco
Worldwide produces licorice products for sale to the tobacco, food,
pharmaceutical and confectionery industries.
Forward-Looking Statements
This press release contains forward-looking statements that
reflect management's current assumptions and estimates of future
performance and economic conditions, which are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are subject to a number
of risks and uncertainties, many of which are beyond M & F
Worldwide's control. All statements other than statements of
historical facts included in this press release, including those
regarding M & F Worldwide's strategy, future operations,
financial position, estimated revenues, projected costs,
projections, prospects, plans and objectives of management, are
forward-looking statements. When used in this press release,
the words "believes," "anticipates," "plans," "expects," "intends,"
"estimates" or similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain such identifying words. All
forward-looking statements speak only as of the date of this press
release. Although M & F Worldwide believes that its
plans, intentions and expectations reflected in or suggested by the
forward-looking statements made in this press release are
reasonable, such plans, intentions or expectations may not be
achieved. In addition to factors described in M & F
Worldwide's Securities and Exchange Commission filings and others,
the following factors may cause M & F Worldwide's actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements contained in this press
release include: (1) economic, climatic or political
conditions in countries in which Mafco Worldwide sources licorice
root; (2) additional government regulation of tobacco products,
tobacco industry litigation or enactment of new or increased taxes
on cigarettes or other tobacco products, to the extent any of the
foregoing curtail growth in or actually reduce consumption of
tobacco products in which licorice products are used or place
limitations on the use of licorice extracts as additives used in
manufacturing tobacco products; (3) 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; (4) unfavorable foreign
currency fluctuations; (5) difficult conditions in financial
markets, the downturn in and potential worsening of general
economic and market conditions and the impact of the credit crisis;
(6) M & F Worldwide's substantial indebtedness; (7) covenant
restrictions under M & F Worldwide's indebtedness that may
limit its ability to operate its business and react to market
changes; (8) the maturity of the principal industry in which the
Harland Clarke segment operates and trends in the paper check
industry, including a faster than anticipated decline in check
usage due to increasing use of alternative payment methods, a
decline in consumer confidence and/or checking account openings and
other factors, and our ability to grow non-check-related product
lines; (9) consolidation among or failure of financial
institutions, decreased spending by financial institutions on our
products and services and other adverse changes among the large
clients on which M & F Worldwide depends, resulting in
decreased revenues and/or pricing pressure; (10) the ability to
retain M & F Worldwide's clients; (11) the ability to retain M
& F Worldwide's key employees and management; (12) lower than
expected cash flow from operations; (13) significant increases in
interest rates; (14) intense competition in all areas of M & F
Worldwide's business; (15) interruptions or adverse changes in M
& F Worldwide's supplier relationships, technological capacity,
intellectual property matters, and applicable laws; (16) decreases
to educational budgets as a result of the continued general
economic downturn and the resulting impact on Scantron's customers;
(17) variations in contemplated brand strategies, business
locations, management positions and other business decisions in
connection with integrating acquisitions; (18) M & F
Worldwide's ability to successfully integrate and manage future
acquisitions; (19) M & F Worldwide's ability to implement any
or all components of its business strategy or realize all of its
expected cost savings or synergies from acquisitions; (20)
acquisitions otherwise not being successful from a financial point
of view, including, without limitation, due to any difficulties
with M & F Worldwide's servicing its debt obligations; and (21)
weak economic conditions and declines in the financial performance
of our businesses that may result in material impairment
charges.
You should read carefully the factors described in M & F
Worldwide's Annual Report on Form 10-K for the year ended
December 31, 2009 and Form 10-Q for
the quarterly period ended June 30,
2010 for a description of risks that could, among other
things, cause actual results to differ from these forward looking
statements.
Non-GAAP Financial Measures
In this release, M & F Worldwide presents certain adjusted
financial measures that are not calculated according to generally
accepted accounting principles in the
United States ("GAAP"). These non-GAAP financial
measures are designed to complement the GAAP financial information
presented in this release because management believes they present
information regarding M & F Worldwide that management believes
is useful to investors. The non-GAAP financial measures
presented should not be considered in isolation from or as a
substitute for the comparable GAAP financial measure.
EBITDA represents net income before interest income and expense,
income taxes, depreciation and amortization (other than
amortization related to contract acquisition payments). M
& F Worldwide presents EBITDA because it believes it is an
important measure of its performance and believes it is frequently
used by securities analysts, investors and other interested parties
in the evaluation of companies in M & F Worldwide's
industries.
M & F Worldwide believes EBITDA provides useful information
with respect to its ability to meet its future debt service,
capital expenditures, working capital requirements and overall
operating performance, although EBITDA should not be considered as
a measure of liquidity. In addition, M & F Worldwide
utilizes EBITDA when interpreting operating trends and results of
operations of its business.
M & F Worldwide also uses EBITDA for the following purposes:
Mafco Worldwide's and Harland Clarke Holdings' senior credit
facilities use EBITDA (with additional adjustments) to measure
compliance with financial covenants such as debt incurrence.
M & F Worldwide's subsidiaries executive compensation is
based on EBITDA (with additional adjustments) performance measured
against targets. EBITDA is also widely used by M & F
Worldwide and others in its industry to evaluate and value
potential acquisition candidates. EBITDA has limitations as
an analytical tool, and you should not consider it in isolation or
as a substitute for analysis of our results as reported under GAAP.
See below for a description of these limitations. Because of
these limitations, EBITDA should not be considered as a measure of
discretionary cash available to M & F Worldwide to invest in
the growth of its business.
In addition, in evaluating EBITDA, you should be aware that in
the future M & F Worldwide may incur expenses such as those
excluded in calculating it. M & F Worldwide's
presentation of this measure should not be construed as an
inference that its future results will be unaffected by unusual or
non-recurring items.
EBITDA has limitations as an analytical tool, and you should not
consider it in isolation or as a substitute for analysis of our
results as reported under GAAP. Some of these limitations are:
- it does not reflect M & F Worldwide's cash expenditures and
future requirements for capital expenditures or contractual
commitments;
- it does not reflect changes in, or cash requirements for, M
& F Worldwide's working capital needs;
- it does not reflect the significant interest expense or the
cash requirements necessary to service interest or principal
payments on M & F Worldwide's debt;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced in the future, and EBITDA does not reflect any cash
requirements for such replacements;
- it is not adjusted for all non-cash income or expense items
that are reflected in M & F Worldwide's statements of cash
flows; and
- other companies in M & F Worldwide's industries may
calculate EBITDA differently from M & F Worldwide, limiting its
usefulness as a comparative measure.
Because of these limitations, EBITDA should not be considered as
a measure of discretionary cash available to invest in the growth
of M & F Worldwide's business or as a measure of cash that will
be available to M & F Worldwide to meet its obligations.
You should compensate for these limitations by relying
primarily on M & F Worldwide's GAAP results and using EBITDA
only supplementally.
M & F Worldwide presents Adjusted EBITDA as a supplemental
measure of its performance. M & F Worldwide prepares Adjusted
EBITDA by adjusting EBITDA to reflect the impact of a number of
items it does not consider indicative of M & F Worldwide's
ongoing operating performance. Such items include, but are
not limited to, gain on early extinguishment of debt, restructuring
costs, intangible asset impairment charges, deferred purchase price
compensation related to an acquisition and certain acquisition
accounting adjustments. You are encouraged to evaluate each
adjustment and the reasons M & F Worldwide considers them
appropriate for supplemental analysis. As an analytical tool,
Adjusted EBITDA is subject to all of the limitations applicable to
EBITDA. In addition, in evaluating Adjusted EBITDA, you
should be aware that in the future, M & F Worldwide may incur
expenses, including cash expenses, similar to the adjustments in
this presentation. M & F Worldwide's presentation of
Adjusted EBITDA should not be construed as an inference that its
future results will be unaffected by unusual or non-recurring
items.
- tables to follow -
M & F Worldwide Corp. and
Subsidiaries
Consolidated Statements of
Income
(in millions, except per share
data)
|
|
|
(unaudited)
|
|
|
|
Three Months
Ended
June 30,
|
Six Months Ended
June 30,
|
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
|
|
|
|
|
Product
revenues, net
|
$ 374.0
|
$ 377.4
|
$ 756.8
|
$ 766.2
|
|
Service
revenues, net
|
77.3
|
74.5
|
151.7
|
150.0
|
|
Total net revenues
|
451.3
|
451.9
|
908.5
|
916.2
|
|
Cost of
products sold
|
217.9
|
225.2
|
444.6
|
460.4
|
|
Cost of
services provided
|
40.8
|
38.0
|
78.5
|
77.9
|
|
Total cost of
revenues
|
258.7
|
263.2
|
523.1
|
538.3
|
|
Gross
profit
|
192.6
|
188.7
|
385.4
|
377.9
|
|
Selling,
general and administrative expenses
|
105.5
|
105.1
|
207.1
|
214.9
|
|
Asset
impairment charges
|
0.6
|
--
|
0.6
|
--
|
|
Restructuring costs
|
7.0
|
13.6
|
10.2
|
24.7
|
|
Operating income
|
79.5
|
70.0
|
167.5
|
138.3
|
|
Interest
income
|
0.3
|
0.4
|
0.6
|
0.9
|
|
Interest
expense
|
(30.8)
|
(36.2)
|
(61.4)
|
(74.8)
|
|
Gain on
early extinguishment of debt
|
--
|
8.9
|
--
|
61.5
|
|
Other
(expense) income, net
|
--
|
(0.1)
|
(0.2)
|
0.8
|
|
Income before income
taxes
|
49.0
|
43.0
|
106.5
|
126.7
|
|
Provision
for income taxes
|
19.2
|
13.9
|
43.1
|
46.3
|
|
Net income
|
$
29.8
|
$
29.1
|
$
63.4
|
$
80.4
|
|
|
|
|
|
|
|
Earnings per
common share:
|
|
|
|
|
|
Basic
|
$
1.54
|
$
1.51
|
$
3.28
|
$
4.16
|
|
Diluted
|
$
1.53
|
$
1.50
|
$
3.26
|
$
4.14
|
|
Weighted
average number of shares used in per share calculations:
|
|
|
|
|
|
Basic shares
|
19.3
|
19.3
|
19.3
|
19.3
|
|
Diluted shares
|
19.4
|
19.3
|
19.4
|
19.3
|
|
|
|
|
|
|
|
|
|
M & F Worldwide Corp. and
Subsidiaries
Business Segment
Information
(in millions)
|
|
|
(unaudited)
|
|
|
|
Three Months
Ended
June 30,
|
Six Months Ended
June 30,
|
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
|
|
|
Harland Clarke
segment
|
$ 307.3
|
$ 306.3
|
$ 617.0
|
$ 621.4
|
|
Harland Financial Solutions
segment
|
70.1
|
69.7
|
139.4
|
138.9
|
|
Scantron segment
|
49.1
|
50.7
|
100.2
|
105.1
|
|
Licorice Products
segment
|
28.0
|
25.5
|
55.2
|
51.2
|
|
Eliminations
|
(3.2)
|
(0.3)
|
(3.3)
|
(0.4)
|
|
Total net
revenues
|
$
451.3
|
$
451.9
|
$
908.5
|
$
916.2
|
|
|
|
|
|
|
|
Operating
income
|
|
|
|
|
|
Harland Clarke
segment
|
$ 66.3
|
$ 52.3
|
$ 131.9
|
$ 103.2
|
|
Harland Financial Solutions
segment
|
11.4
|
11.2
|
22.8
|
18.6
|
|
Scantron segment
|
1.8
|
6.7
|
11.1
|
13.5
|
|
Licorice Products
segment
|
7.2
|
7.9
|
14.1
|
16.3
|
|
Corporate
|
(7.2)
|
(8.1)
|
(12.4)
|
(13.3)
|
|
Total
operating income
|
$
79.5
|
$
70.0
|
$
167.5
|
$
138.3
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income to
EBITDA and EBITDA to Adjusted EBITDA (in millions):
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
Six Months Ended
June 30,
|
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
|
|
|
|
|
Net
income
|
$ 29.8
|
$ 29.1
|
$ 63.4
|
$ 80.4
|
|
Interest
expense, net
|
30.5
|
35.8
|
60.8
|
73.9
|
|
Provision
for income taxes
|
19.2
|
13.9
|
43.1
|
46.3
|
|
Depreciation
and amortization
|
40.0
|
41.2
|
80.7
|
82.0
|
|
EBITDA
|
119.5
|
120.0
|
248.0
|
282.6
|
|
Adjustments:
|
|
|
|
|
|
Restructuring costs
(a)
|
7.0
|
13.6
|
10.2
|
24.7
|
|
Deferred purchase price
compensation (b)
|
0.4
|
1.1
|
0.8
|
2.1
|
|
Asset impairment charge
(c)
|
0.6
|
--
|
0.6
|
--
|
|
Gain on early extinguishment of
debt (d)
|
--
|
(8.9)
|
--
|
(61.5)
|
|
Impact of acquisition accounting
adjustments (e)
|
0.2
|
0.1
|
0.6
|
0.3
|
|
Adjusted
EBITDA
|
$
127.7
|
$
125.9
|
$
260.2
|
$
248.2
|
|
|
|
(a) Reflects restructuring
costs, including adjustments, recorded in accordance with GAAP,
consisting primarily
of severance, post-closure
facility expenses and other related expenses.
(b) Reflects charges
accrued under a deferred purchase price agreement required to be
recorded as
compensation expense in selling,
general and administrative expense resulting from an
acquisition.
(c) Reflects non-cash
impairment charges from the write-down of assets held for
sale.
(d) Reflects gains from
the purchase of Harland Clarke Holdings bonds at less than their
principal amount.
(e) Reflects the non-cash
fair value deferred revenue adjustments related to acquisition
accounting.
|
|
|
|
|
|
|
|
SOURCE M & F Worldwide Corp.
Copyright g. 5 PR Newswire