NEW YORK, March 4, 2011 /PRNewswire/ -- M & F Worldwide
Corp. ("M & F Worldwide" or the "Company") (NYSE: MFW) today
reported results for the fourth quarter and year ended December 31, 2010. Additionally, M & F
Worldwide filed its Annual Report on Form 10-K with the Securities
and Exchange Commission today.
M & F Worldwide will host a conference call to discuss its
fourth quarter and full year 2010 results on March 16, 2011, at 9:00
a.m. (EDT). The conference call will be accessible by
dialing (800) 553-0326 in the United
States and (612) 332-0636 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:
193239. The replay will be available from 11:00 a.m. (EDT) Wednesday, March 16, 2011,
through 11:59 p.m. (EDT) Wednesday, March
30, 2011.
2010 Highlights
- Net revenues of $1,782.6 million,
down $31.5 million, or 1.7%, as
compared to 2009.
- Operating income of $313.6
million, up $47.4 million, or
17.8%, as compared to 2009. Operating income for 2009
included a $44.2 million non-cash
write-down of the value of the Harland Clarke tradename.
- Net income of $120.9 million, up
$1.2 million, or 1.0%, as compared to
2009. Net income for 2009 included a $65.0 million ($40.1
million after tax) gain on early extinguishment of Harland
Clarke Holdings' debt, partially offset by the $44.2 million ($27.0
million after tax) non-cash write-down of the value of the
Harland Clarke tradename. The increase in net income for 2010 also
reflects a $21.3 million
($13.2 million after tax) decrease in
interest expense.
Full Year 2010 Performance
Consolidated Results
Consolidated net revenues decreased by $31.5 million, or 1.7%, to $1,782.6 million for 2010 from $1,814.1 million for 2009. The decrease was
primarily due to volume declines for the Harland Clarke and
Scantron segments, partially offset by revenues from Harland
Clarke's 2009 acquisitions of Protocol IMS and SubscriberMail,
increased revenues for the Licorice Products segment, as well as
increased revenues for the Harland Financial Solutions segment.
Operating income increased by $47.4
million, or 17.8%, to $313.6
million for 2010 from $266.2
million for 2009. The increase was primarily due to a
$40.7 million decrease in asset
impairment charges, labor cost reductions resulting from
restructuring activities and a $10.2
million decrease in restructuring costs, partially offset by
volume declines for the Harland Clarke and Scantron segments, an
increase in amortization expense of $6.3
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 for the Harland
Clarke and Harland Financial Solutions segments and a change in the
mix of products sold and increased raw material costs for the
Licorice Products segment.
Net income increased by $1.2
million, or 1.0%, to $120.9
million for 2010 from $119.7
million for 2009. The increase was primarily due to
the $47.4 million ($29.4 million after tax) increase in operating
income and a $21.3 million
($13.2 million after tax) decrease in
interest expense due to lower effective interest rates and a
decrease in total debt outstanding, substantially offset by a
$65.0 million ($40.1 million after tax) reduction in gains on
early extinguishment of debt.
Adjusted EBITDA decreased by $7.2
million, or 1.4%, to $502.6
million for 2010 from $509.8
million for 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
$34.8 million, or 2.8%, to
$1,191.2 million in 2010 from
$1,226.0 million in 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 a $27.0 million
increase in revenues from businesses acquired in 2009, the addition
of new clients, and a one-time payment resulting from the loss of a
client. Revenues from new client additions more than offset lost
revenues from client losses. Operating income for the Harland
Clarke segment increased by $42.2
million, or 21.6%, to $238.0
million in 2010 from $195.8
million in 2009. The increase in operating income was
primarily due to a $29.9 million
decrease in asset impairment charges, as well as labor cost
reductions and decreases in depreciation and occupancy expenses,
primarily resulting from restructuring activities, a $13.4 million decrease in restructuring costs,
and a one-time payment resulting from the loss of a client. These
were partially offset by volume declines, an increase in
amortization expense of $4.6 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 costs in connection with
investments in growth initiatives. Operating income for 2010
and 2009 includes restructuring costs of $12.3 million and $25.7
million, respectively.
Net revenues for the Harland Financial Solutions segment
increased by $3.8 million, or 1.4%,
to $282.7 million in 2010 from
$278.9 million in 2009. Increases in
term license, maintenance, outsourced host processing revenues and
early termination fees as well as revenues from the Parsam
acquisition were partially offset by decreases in other license
revenues and hardware sales. Operating income for the Harland
Financial Solutions segment increased by $15.8 million, or 48.2%, to $48.6 million in 2010 from $32.8 million in 2009. The increase in
operating income was primarily due to a $10.6 million decrease in asset impairment
charges, increased revenues, a $2.4
million decrease in compensation expense related to an
incentive agreement from an acquisition, labor cost reductions
resulting from restructuring activities, and a $1.0 million decrease in restructuring costs.
These changes were partially offset by a $1.7 million 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. Operating income for 2010 includes
charges of $1.1 million for
compensation expense related to an incentive agreement from an
acquisition and $2.8 million for
restructuring costs. Operating income for 2009 includes
charges of $3.5 million for
compensation expense related to an incentive agreement from an
acquisition and $3.8 million for
restructuring costs.
Net revenues for the Scantron segment decreased by $4.3 million, or 2.1%, to $203.7 million in 2010 from $208.0 million in 2009. The decrease was
primarily due to declines in forms, hardware and service
maintenance revenues, partially offset by increases in revenues
from web-based products and services for the education market,
sales of a solution that assists financial institutions with the
implementation of changes to federal regulations regarding
overdraft services provided to financial institution customers and
revenues from the acquisition of Spectrum K12 School Solutions in
July 2010. Operating income for the
Scantron segment decreased by $9.2
million, or 26.7%, to $25.3
million in 2010 from $34.5
million in 2009. The decrease in operating income was
primarily due to a $4.2 million
increase in restructuring costs, volume declines, and costs
incurred 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 2010 and 2009 includes restructuring
costs of $7.2 million and
$3.0 million, respectively.
Net revenues for the Licorice Products segment increased by
$9.6 million, or 9.4%, to
$111.4 million in 2010 from
$101.8 million in 2009.
Magnasweet and pure licorice derivative sales increased by
$4.8 million primarily due to an
increase in shipment volumes to international customers. Sales of
licorice extract to the worldwide tobacco industry increased by
$3.2 million in 2010 compared to
2009. Certain customers reduced their licorice extract purchases
during 2009 and resumed more normal purchase patterns in 2010.
Sales of licorice extract to non-tobacco customers increased by
$1.6 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 2010 versus 2009. Operating income for the Licorice Products
segment decreased by $3.7 million, or
11.5%, to $28.4 million in 2010 from
$32.1 million in 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.
Fourth Quarter 2010 Performance
Consolidated Results
Consolidated net revenues decreased by $13.0 million, or 2.9%, to $434.2 million for the fourth quarter of 2010
from $447.2 million for the fourth
quarter of 2009. The decrease was primarily due to volume
declines and decreased revenues per unit for the Harland Clarke
segment, partially offset by a $4.3
million increase in revenues from Harland Clarke's 2009
acquisitions of Protocol IMS and SubscriberMail, increased revenues
from the Licorice Products segment, as well as increased revenues
for the Harland Financial Solutions and Scantron segments.
Operating income increased by $36.2
million to $72.5 million for the fourth quarter of 2010 from
$36.3 million for the fourth quarter
of 2009. The increase was primarily due to a $43.0 million decrease in asset impairment
charges, partially offset by volume declines and decreased revenues
per unit for the Harland Clarke segment and a $3.6 million increase in restructuring charges.
Net income increased by $24.5 million to
$27.3 million for the fourth quarter of 2010 from
$2.8 million for the fourth quarter
of 2009. The increase was primarily due to the $36.2 million ($22.4
million after tax) increase in operating income and a
$2.8 million ($1.7 million after tax) decrease in interest
expense, partially offset by a $3.0
million ($1.9 million after
tax) reduction in gains on early extinguishment of debt.
Adjusted EBITDA decreased by $3.3
million, or 2.6%, to $121.3
million for the fourth quarter of 2010 from $124.6 million for the fourth 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
$15.3 million, or 5.1%, to
$284.3 million for the fourth quarter
of 2010 from $299.6 million for the
fourth 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 a
$4.3 million increase in revenues
from businesses acquired in 2009 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 increased by $31.9 million,
or 137.5%, to $55.1 million for the
fourth quarter of 2010 from $23.2
million for the fourth quarter of 2009. The increase in
operating income was primarily due to a $32.2 million decrease in asset impairment
charges, as well as labor cost reductions and decreases in
depreciation and occupancy expenses primarily resulting from
restructuring activities, and decreases in general overhead
expenses. These changes were partially offset by volume
declines, a decrease in revenues per unit, and a $0.9 million increase in restructuring costs.
Operating income for the fourth quarter of 2010 and 2009 includes
restructuring costs of $4.8 million
and $3.9 million, respectively.
Net revenues for the Harland Financial Solutions segment
increased by $0.3 million, or 0.4%,
to $72.4 million for the fourth
quarter of 2010 from $72.1 million
for the fourth 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
$7.3 million, or 155.3%, to
$12.0 million for the fourth quarter
of 2010 from $4.7 million for the
fourth quarter of 2009. The increase in operating income was
primarily due to a $10.6 million
decrease in asset impairment charges and a $0.6 million reduction in compensation expense
related to an incentive agreement, partially offset by a
$2.5 million increase in
restructuring costs. Operating income for the fourth quarter of
2010 includes $2.2 million for
restructuring costs. Operating income for the fourth quarter
of 2009 includes charges of $0.6
million for compensation expense related to an incentive
agreement from an acquisition and $(0.3)
million for restructuring costs.
Net revenues for the Scantron segment increased by $0.2 million, or 0.4%, to $50.2 million for the fourth quarter of 2010 from
$50.0 million for the fourth quarter
of 2009. The increase was primarily due to the acquisition of
Spectrum K12 School Solutions in July
2010, higher revenue from web-based products and services
for the education market and an increase in revenue from
installation contracts. These increases were partially offset by
declines in hardware, service maintenance and forms revenues.
Operating income for the Scantron segment decreased by $3.6 million, or 36.4%, to $6.3 million for the fourth quarter of 2010 from
$9.9 million for the fourth quarter
of 2009. The decrease in operating income was primarily due to
costs incurred in connection with investments in growth initiatives
in 2010.
Net revenues for the Licorice Products segment increased by
$2.2 million, or 8.6%, to
$27.8 million for the fourth quarter
of 2010 from $25.6 million for the
fourth quarter of 2009. Sales of licorice extract to the worldwide
tobacco industry increased by $1.2
million in 2010 compared to 2009. Certain customers reduced
their licorice extract purchases during 2009 and resumed more
normal purchase patterns in 2010. Magnasweet and pure
licorice derivative sales increased by $1.1
million primarily due to an increase in shipment volumes to
international customers. Sales of licorice extract to
non-tobacco customers declined by $0.1
million primarily due to an increase in shipment volumes to
confectionery customers which was more than offset by the
unfavorable impact of the U.S. dollar translation of Mafco
Worldwide's Euro denominated sales due to the stronger dollar in
2010 versus 2009. Operating income for the Licorice Products
segment decreased by $0.7 million, or
9.0%, to $7.1 million for the fourth
quarter of 2010 from $7.8 million for
the fourth 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.
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
acquisitions; (19) M & F Worldwide's ability to achieve
vendor-specific objective evidence for software businesses we have
acquired or will acquire, which could affect the timing of
recognition of revenue (20) 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;
(21) 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 (22) 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, 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
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, 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
December 31,
|
Year
Ended
December 31,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
Product revenues, net
|
$ 356.8
|
$ 371.4
|
$ 1,456.2
|
$ 1,514.8
|
|
Service revenues, net
|
77.4
|
75.8
|
326.4
|
299.3
|
|
Total net revenues
|
434.2
|
447.2
|
1,782.6
|
1,814.1
|
|
Cost of products sold
|
208.3
|
220.7
|
857.2
|
903.3
|
|
Cost of services
provided
|
40.3
|
37.8
|
171.3
|
152.1
|
|
Total cost of
revenues
|
248.6
|
258.5
|
1,028.5
|
1,055.4
|
|
Gross profit
|
185.6
|
188.7
|
754.1
|
758.7
|
|
Selling, general and
administrative expenses
|
104.8
|
104.7
|
414.5
|
415.6
|
|
Asset impairment
charges
|
1.2
|
44.2
|
3.7
|
44.4
|
|
Restructuring costs
|
7.1
|
3.5
|
22.3
|
32.5
|
|
Operating income
|
72.5
|
36.3
|
313.6
|
266.2
|
|
Interest income
|
0.3
|
0.5
|
1.0
|
1.7
|
|
Interest expense
|
(28.3)
|
(31.1)
|
(117.8)
|
(139.1)
|
|
Gain on early extinguishment of
debt
|
–
|
3.0
|
–
|
65.0
|
|
Other expense, net
|
(0.4)
|
(1.8)
|
(0.7)
|
(1.1)
|
|
Income before income
taxes
|
44.1
|
6.9
|
196.1
|
192.7
|
|
Provision for income
taxes
|
16.8
|
4.1
|
75.2
|
73.0
|
|
Net income
|
$
27.3
|
$
2.8
|
$
120.9
|
$
119.7
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
Basic
|
$
1.41
|
$
0.15
|
$
6.26
|
$
6.20
|
|
Diluted
|
$
1.40
|
$
0.14
|
$
6.22
|
$
6.17
|
|
Weighted average number of
shares used in per share calculations:
|
|
|
|
|
|
Basic
shares
|
19.3
|
19.3
|
19.3
|
19.3
|
|
Diluted
shares
|
19.4
|
19.4
|
19.4
|
19.4
|
|
|
|
|
|
|
|
|
M & F
Worldwide Corp. and Subsidiaries
Business
Segment Information
(in
millions)
|
|
|
(unaudited)
|
|
|
|
Three Months
Ended
December 31,
|
Year
Ended
December 31,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
Net revenues
|
|
|
|
|
|
Harland Clarke
segment
|
$ 284.3
|
$ 299.6
|
$ 1,191.2
|
$ 1,226.0
|
|
Harland Financial Solutions
segment
|
72.4
|
72.1
|
282.7
|
278.9
|
|
Scantron segment
|
50.2
|
50.0
|
203.7
|
208.0
|
|
Licorice Products
segment
|
27.8
|
25.6
|
111.4
|
101.8
|
|
Eliminations
|
(0.5)
|
(0.1)
|
(6.4)
|
(0.6)
|
|
Total net revenues
|
$
434.2
|
$
447.2
|
$
1,782.6
|
$
1,814.1
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
Harland Clarke
segment
|
$ 55.1
|
$ 23.2
|
$ 238.0
|
$ 195.8
|
|
Harland Financial Solutions
segment
|
12.0
|
4.7
|
48.6
|
32.8
|
|
Scantron segment
|
6.3
|
9.9
|
25.3
|
34.5
|
|
Licorice Products
segment
|
7.1
|
7.8
|
28.4
|
32.1
|
|
Corporate
|
(8.0)
|
(9.3)
|
(26.7)
|
(29.0)
|
|
Total operating
income
|
$
72.5
|
$
36.3
|
$
313.6
|
$
266.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income to
EBITDA and EBITDA to Adjusted EBITDA (in
millions):
|
|
|
(unaudited)
|
|
|
Three Months
Ended
December 31,
|
Year
Ended
December 31,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
|
|
|
Net income
|
$ 27.3
|
$ 2.8
|
$ 120.9
|
$ 119.7
|
|
Interest expense, net
|
28.0
|
30.6
|
116.8
|
137.4
|
|
Provision for income
taxes
|
16.8
|
4.1
|
75.2
|
73.0
|
|
Depreciation and
amortization
|
39.7
|
41.8
|
159.6
|
163.9
|
|
EBITDA
|
111.8
|
79.3
|
472.5
|
494.0
|
|
Adjustments:
|
|
|
|
|
|
Restructuring costs
(a)
|
7.1
|
3.5
|
22.3
|
32.5
|
|
Deferred purchase price
compensation (b)
|
0.1
|
0.6
|
1.4
|
3.5
|
|
Asset impairment charges
(c)
|
1.2
|
44.2
|
3.7
|
44.4
|
|
Gain on early extinguishment of
debt (d)
|
–
|
(3.0)
|
–
|
(65.0)
|
|
Impact of acquisition accounting
adjustments (e)
|
1.1
|
–
|
2.7
|
0.4
|
|
Adjusted EBITDA
|
$
121.3
|
$
124.6
|
$
502.6
|
$
509.8
|
|
(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 deferred purchase price agreements required to be
recorded as compensation expense resulting from
acquisitions.
(c) Reflects
non-cash impairment charges from the write-down of
assets.
(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.