NEW YORK, Nov. 4, 2010 /PRNewswire-FirstCall/ -- M & F
Worldwide Corp. ("M & F Worldwide" or the "Company") (NYSE:
MFW) today reported results for the third quarter and nine months
ended September 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
third quarter 2010 results on November 11,
2010, at 9:00 a.m. (EST).
The conference call will be accessible by dialing (800)
230-1096 in the United States and
(612) 332-0226 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: 174921. The
replay will be available from 11:00 a.m.
(EST) Thursday, November 11, 2010, through 11:59 p.m. (EST) Thursday, November 25, 2010.
Third Quarter 2010 Highlights
- Net revenues of $439.9 million,
down $10.8 million, or 2.4%, as
compared to the third quarter of 2009.
- Operating income of $73.6
million, down $18.0 million,
or 19.7%, as compared to the third quarter of 2009.
- Net income of $30.2 million, down
$6.3 million, or 17.3%, as compared
to the third quarter of 2009.
Third Quarter 2010 Performance
Consolidated Results
Consolidated net revenues decreased by $10.8 million, or 2.4%, to $439.9 million for the third quarter of 2010 from
$450.7 million for the third quarter
of 2009. The decrease was primarily due to volume declines
and decreased revenues per unit at the Harland Clarke segment,
partially offset by revenues from Harland Clarke's 2009
acquisitions of Protocol IMS and SubscriberMail, as well as
increased revenues at the Licorice Products, Harland Financial
Solutions and Scantron segments.
Operating income decreased by $18.0
million, or 19.7%, to $73.6
million for the third quarter of 2010 from $91.6 million for the third quarter of 2009. The
decrease was primarily due to the volume declines and decreased
revenues per unit at the Harland Clarke segment, a $6.6 million increase in selling, general and
administrative expenses due in part to acquisitions and investments
in growth initiatives at the Harland Clarke and Scantron segments,
as well as a $1.7 million increase in
non-cash asset impairment charges. These changes were partially
offset by labor cost reductions resulting from restructuring
activities and increased revenues at the Harland Financial
Solutions segment.
Net income decreased by $6.3
million, or 17.3%, to $30.2
million for the third quarter of 2010 from $36.5 million for the third quarter of 2009.
The decrease in net income was primarily due to the
$18.0 million ($11.0 million after tax) decline in operating
income, partially offset by a $4.9
million ($3.0 million after
tax) decrease in net interest expense as compared to the third
quarter of 2009.
Adjusted EBITDA decreased by $15.7
million, or 11.5%, to $121.1
million for the third quarter of 2010 from $136.8 million for the third 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 decreased by
$15.1 million, or 5.0%, to
$289.9 million for the third quarter
of 2010 from $305.0 million for
the third quarter of 2009. The decrease was primarily due to
volume declines in check and related products, the loss of a client
and a decrease in revenues per unit, partially offset by revenues
from the Protocol IMS and SubscriberMail acquisitions and the
addition of new clients. Revenues from new client additions more
than offset lost revenues from client losses. Operating income for
the Harland Clarke segment decreased by $18.4 million, or 26.5%, to $51.0 million for the third quarter of 2010 from
$69.4 million for the third quarter
of 2009. The decrease in operating income was primarily due
to volume declines, decreased revenues per unit, costs in
connection with investments in growth initiatives, a $1.7 million increase in non-cash asset
impairment charges primarily related to the abandonment of a
development project, and an increase in amortization expense
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. These changes were partially offset by
labor cost reductions and decreases in depreciation and occupancy
expenses, primarily resulting from restructuring activities.
Operating income for the third quarters of 2010 and 2009 includes
restructuring costs of $4.2 million
and $3.4 million, respectively.
Net revenues for the Harland Financial Solutions segment
increased by $3.0 million, or
4.4%, to $70.9 million for the
third quarter of 2010 from $67.9 million for the third quarter of 2009.
Increases in maintenance, outsourced host processing, term license
and other license revenues were partially offset by a decrease in
hardware sales. Operating income for the Harland Financial
Solutions segment increased by $4.3
million, or 45.3%, to $13.8
million for the third quarter of 2010 from $9.5 million for the third quarter of 2009.
The increase in operating income was primarily due to the
increased revenues, labor cost reductions resulting from
restructuring activities, declines in general overhead expenses and
a reduction in compensation expense related to an incentive
agreement, partially offset by an increase in selling expenses and
amortization expense 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 third quarter of 2010 includes
charges of $0.3 million for
compensation expense related to an incentive agreement from an
acquisition and $0.2 million for
restructuring costs. Operating income for the third quarter
of 2009 includes charges of $0.8
million for compensation expense related to an incentive
agreement from an acquisition and $0.9
million for restructuring costs.
Net revenues for the Scantron segment increased by
$0.4 million, or 0.8%, to $53.3
million for the third quarter of 2010 from $52.9 million for the third quarter of 2009.
The increase was primarily due to increased revenues from services
for the education market, 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, and the acquisition of
Spectrum K12 School Solutions in July
2010. These increases were partially offset by declines in
hardware, service maintenance and forms revenues. Operating
income for the Scantron segment decreased by $3.2 million, or 28.8%, to $7.9 million for the third quarter of 2010 from
$11.1 million for the third quarter
of 2009. The decrease in operating income was primarily due
to volume declines, costs in connection with investments in growth
initiatives in 2010 and a $0.6
million increase in restructuring costs, partially offset by
labor cost reductions resulting from restructuring activities.
Operating income for the third quarter of 2010 includes
restructuring costs of $0.6
million.
Net revenues for the Licorice Products segment increased by
$3.4 million, or 13.6%, to
$28.4 million for the third quarter
of 2010 from $25.0 million for the
third quarter of 2009. Sales of licorice extract to the worldwide
tobacco industry increased by $2.0
million, primarily due to the timing of shipments during the
2010 period compared to the 2009 period. Certain customers reduced
their on-hand inventory of licorice extract in the 2009 period and
resumed more normal shipment patterns in the 2010 period.
Magnasweet and pure licorice derivative sales increased by
$1.0 million primarily due to an
increase in shipment volumes to international customers. Sales of
licorice extract to non-tobacco customers increased by $0.4 million primarily due to an increase in
shipment volumes to confectionery customers partially offset by the
unfavorable impact of the U.S. dollar translation of Mafco
Worldwide's Euro denominated sales due to the stronger dollar in
the 2010 period versus the 2009 period. Operating income for the
Licorice Products segment decreased by $0.8
million, or 10.0%, to $7.2
million for the third quarter of 2010 from $8.0 million for the third 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, increased raw material costs as a percentage of
sales and increased selling, general and administrative
expenses.
Year-to-date 2010 Performance
Consolidated Results
Consolidated net revenues decreased by $18.5 million, or 1.4%, to $1,348.4 million for the nine months ended
September 30, 2010 from $1,366.9 million for the nine months ended
September 30, 2009. The decrease was
primarily due to volume declines at the Harland Clarke and Scantron
segments, partially offset by revenues from Harland Clarke's 2009
acquisitions of Protocol IMS and SubscriberMail, as well as
increased revenues at the Licorice Products and Harland Financial
Solutions segments.
Operating income increased by $11.2
million, or 4.9%, to $241.1
million for the nine months ended September 30, 2010 from $229.9 million for the nine months ended
September 30, 2009. The
increase was primarily due to a $13.8
million decrease in restructuring costs and labor cost
reductions resulting from restructuring activities, partially
offset by volume declines at the Harland Clarke and Scantron
segments, a change in the mix of products sold and increased raw
material costs at the Licorice Products segment and a $2.3 million increase in non-cash asset
impairment charges.
Net income decreased by $23.3
million, or 19.9%, to $93.6
million for the nine months ended September 30, 2010 from $116.9 million for the nine months ended
September 30, 2009. The
decrease in net income was primarily due to a $62.0 million ($38.3
million after tax) gain on early extinguishment of debt
related to the purchase of $116.2
million principal amount of Harland Clarke Holdings Corp.
Senior Notes in the nine months ended September 30, 2009. The decrease in net
income due to this non-recurring gain was partially offset by
improvements in net interest expense, which declined $18.0 million ($11.0
million after tax), and operating income, which increased
$11.2 million ($6.8 million after tax), as compared to the nine
months ended September 30, 2009.
Adjusted EBITDA decreased by $3.7
million, or 1.0%, to $381.3
million for the nine months ended September 30, 2010 from $385.0 million for the nine months ended
September 30, 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
$19.5 million, or 2.1%, to
$906.9 million for the nine months
ended September 30, 2010 from
$926.4 million for the nine
months ended September 30, 2009. The
decrease was primarily due to volume declines in check and related
products and the loss of a client, partially offset by revenues
from the Protocol IMS and SubscriberMail acquisitions, the addition
of new clients, a one-time payment resulting from the loss of a
client, and increased revenues per unit. Revenues from new client
additions more than offset lost revenues from client losses.
Operating income for the Harland Clarke segment increased by
$10.3 million, or 6.0%, to
$182.9 million in the 2010 period
from $172.6 million in the 2009
period. The increase in operating income was primarily due to
a $14.3 million decrease in
restructuring costs, labor cost reductions and decreases in
depreciation and occupancy expenses, primarily resulting from
restructuring activities, a one-time payment resulting from the
loss of a client, and increased revenues per unit. These changes
were partially offset by volume declines, an increase in
amortization expense of $4.2 million
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 and a $2.3
million increase in non-cash asset impairment charges.
Operating income for the nine months ended September 30, 2010 and 2009 includes
restructuring costs of $7.5 million
and $21.8 million, respectively.
Net revenues for the Harland Financial Solutions segment
increased by $3.5 million, or
1.7%, to $210.3 million for the
nine months ended September 30, 2010
from $206.8 million for
the nine months ended September 30,
2009. Increases in term license, maintenance, and outsourced
host processing revenues and early termination fees were partially
offset by decreases in other license revenues and hardware sales.
Operating income for the Harland Financial Solutions segment
increased by $8.5 million, or 30.2%,
to $36.6 million in the 2010 period
from $28.1 million in the 2009
period. The increase in operating income was primarily due to
a $3.5 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 expense 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 nine months ended
September 30, 2010 includes charges
of $1.1 million for compensation
expense related to an incentive agreement from an acquisition and
$0.6 million for restructuring costs.
Operating income for the nine months ended September 30, 2009 includes charges of
$2.9 million for compensation expense
related to an incentive agreement from an acquisition and
$4.1 million for restructuring
costs.
Net revenues for the Scantron segment decreased by $4.5 million, or 2.8%, to $153.5 million for the nine months ended
September 30, 2010 from $158.0 million for the nine months ended
September 30, 2009. The decrease was
primarily due to declines in forms, hardware and service
maintenance revenues, partially offset by increases in revenues
from services for the education market, 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, and
the acquisition of Spectrum K12 School Solutions in July 2010. Operating income for the
Scantron segment decreased by $5.6
million, or 22.8%, to $19.0
million in the 2010 period from $24.6
million in the 2009 period. The decrease in operating
income was primarily due to a $4.0
million increase in restructuring costs, volume declines,
and costs in connection with investments in growth initiatives in
2010, partially offset by labor cost reductions resulting
from restructuring activities and decreases in integration
expenses. Operating income for the nine months ended
September 30, 2010 and 2009 includes
restructuring costs of $7.1 million
and $3.1 million, respectively.
Net revenues for the Licorice Products segment increased by
$7.4 million, or 9.7%, to
$83.6 million for the nine months
ended September 30, 2010 from
$76.2 million for the nine months
ended September 30, 2009.
Magnasweet and pure licorice derivative sales increased by
$3.7 million primarily due to an
increase in shipment volumes to international customers. Sales of
licorice extract to the worldwide tobacco industry increased
$2.0 million in the 2010 period
compared to the 2009 period. Certain customers reduced their
on-hand inventory of licorice extract during the 2009 period and
resumed normal shipment patterns in the 2010 period. Sales of
licorice extract to non-tobacco customers increased by $1.7 million primarily due to an increase in
shipment volumes to confectionery customers, partially offset by
the unfavorable impact of the U.S. dollar translation of Mafco
Worldwide's Euro denominated sales due to the stronger dollar in
the 2010 period versus the 2009 period. Operating income for the
Licorice Products segment decreased by $3.0
million, or 12.3%, to $21.3
million in the 2010 period from $24.3
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, increased raw
material costs as a percentage of sales and increased selling,
general and administrative expenses.
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)
|
|
|
|
|
|
(unaudited)
|
|
|
Three Months
Ended
September
30,
|
Nine Months
Ended
September
30,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
Product revenues, net
|
$ 353.8
|
$ 378.7
|
$ 1,099.4
|
$ 1,143.4
|
|
Service revenues, net
|
86.1
|
72.0
|
249.0
|
223.5
|
|
Total net revenues
|
439.9
|
450.7
|
1,348.4
|
1,366.9
|
|
Cost of products sold
|
210.6
|
222.3
|
648.9
|
682.6
|
|
Cost of services
provided
|
46.2
|
36.3
|
131.0
|
114.3
|
|
Total cost of
revenues
|
256.8
|
258.6
|
779.9
|
796.9
|
|
Gross profit
|
183.1
|
192.1
|
568.5
|
570.0
|
|
Selling, general and
administrative expenses
|
102.6
|
96.0
|
309.7
|
310.9
|
|
Asset impairment
charges
|
1.9
|
0.2
|
2.5
|
0.2
|
|
Restructuring costs
|
5.0
|
4.3
|
15.2
|
29.0
|
|
Operating income
|
73.6
|
91.6
|
241.1
|
229.9
|
|
Interest income
|
0.1
|
0.3
|
0.7
|
1.2
|
|
Interest expense
|
(28.1)
|
(33.2)
|
(89.5)
|
(108.0)
|
|
Gain on early extinguishment of
debt
|
–
|
0.5
|
–
|
62.0
|
|
Other (expense) income,
net
|
(0.1)
|
(0.1)
|
(0.3)
|
0.7
|
|
Income before income
taxes
|
45.5
|
59.1
|
152.0
|
185.8
|
|
Provision for income
taxes
|
15.3
|
22.6
|
58.4
|
68.9
|
|
Net income
|
$
30.2
|
$
36.5
|
$
93.6
|
$
116.9
|
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
|
|
Basic
|
$
1.57
|
$
1.89
|
$
4.84
|
$
6.05
|
|
Diluted
|
$
1.55
|
$
1.88
|
$
4.81
|
$
6.02
|
|
Weighted average number of
shares used in per share calculations:
|
|
|
|
|
|
Basic
shares
|
19.3
|
19.3
|
19.3
|
19.3
|
|
Diluted
shares
|
19.5
|
19.4
|
19.4
|
19.3
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M & F
Worldwide Corp. and Subsidiaries
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Business
Segment Information
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(in
millions)
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(unaudited)
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Three Months
Ended
September
30,
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Nine Months
Ended
September
30,
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2010
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2009
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2010
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2009
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Net revenues
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Harland Clarke
segment
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$ 289.9
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$ 305.0
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$ 906.9
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$ 926.4
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Harland Financial Solutions
segment
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70.9
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67.9
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210.3
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206.8
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Scantron segment
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53.3
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52.9
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153.5
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158.0
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Licorice Products
segment
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28.4
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25.0
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83.6
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76.2
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Eliminations
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(2.6)
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(0.1)
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(5.9)
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(0.5)
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Total net revenues
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$
439.9
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$
450.7
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$
1,348.4
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$
1,366.9
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Operating income
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Harland Clarke
segment
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$ 51.0
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$ 69.4
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$ 182.9
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$ 172.6
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Harland Financial Solutions
segment
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13.8
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9.5
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36.6
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28.1
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Scantron segment
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7.9
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11.1
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19.0
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24.6
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Licorice Products
segment
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7.2
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8.0
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21.3
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24.3
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Corporate
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(6.3)
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(6.4)
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(18.7)
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(19.7)
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Total operating
income
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$
73.6
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$
91.6
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$
241.1
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$
229.9
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Reconciliation of net income to
EBITDA and EBITDA to Adjusted EBITDA (in millions):
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(unaudited)
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Three Months
Ended
September
30,
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Nine Months
Ended
September
30,
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2010
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2009
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2010
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2009
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Net income
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$ 30.2
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$ 36.5
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$ 93.6
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$ 116.9
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Interest expense, net
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28.0
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32.9
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88.8
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106.8
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Provision for income
taxes
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15.3
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22.6
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58.4
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68.9
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Depreciation and
amortization
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39.2
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40.1
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119.9
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122.1
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EBITDA
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112.7
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132.1
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360.7
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414.7
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Adjustments:
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Restructuring costs
(a)
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5.0
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4.3
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15.2
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29.0
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Deferred purchase price
compensation (b)
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0.5
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0.8
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1.3
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2.9
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Asset impairment charges
(c)
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1.9
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–
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2.5
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–
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Gain on early extinguishment of
debt (d)
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–
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(0.5)
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–
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(62.0)
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Impact of acquisition accounting
adjustments (e)
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1.0
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0.1
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1.6
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0.4
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Adjusted EBITDA
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$
121.1
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$
136.8
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$
381.3
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$
385.0
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(a) Reflects
restructuring costs, including adjustments, recorded in accordance
with GAAP, consisting primarily of severance,
post-closure facility expenses and other related
expenses.
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(b) Reflects
charges accrued under deferred purchase price agreements required
to be recorded as compensation expense
resulting from acquisitions.
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(c) Reflects
non-cash impairment charges from the write-down of
assets.
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(d) Reflects gains
from the purchase of Harland Clarke Holdings bonds at less than
their principal amount.
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(e) Reflects the
non-cash fair value deferred revenue adjustments related to
acquisition accounting.
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SOURCE M & F Worldwide Corp.