M & F Worldwide Corp. to Hold Conference Call on August 12,
2009 NEW YORK, Aug. 7 /PRNewswire-FirstCall/ -- M & F Worldwide
Corp. (NYSE: MFWNYSE:-NYSE:News) today reported results for the
second quarter and six months ended June 30, 2009. 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 and first half
of 2009 results on August 12, 2009, at 9:00 a.m. (EDT). The
conference call will be accessible by dialing (800) 230-1085 in the
United States and (612) 234-9960 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: 108828. The replay will be available
from 11:00 a.m. (EDT) Wednesday, August 12, 2009, through 11:59
p.m. (EDT) Wednesday, August 26, 2009. Second Quarter 2009
Highlights -- Net revenues of $451.9 million, down 6.8% as compared
to the second quarter of 2008 -- Non-GAAP adjusted net income of
$23.6 million, or $1.22 per non-GAAP diluted share, excluding the
impact of a gain on early extinguishment of debt -- Purchased $24.2
million principal amount of Harland Clarke Holdings Corp. Senior
Notes, resulting in a pre-tax gain of $8.9 million Second Quarter
2009 Performance Consolidated Results Consolidated net revenues
decreased by $33.0 million, or 6.8%, to $451.9 million for the
second quarter of 2009 from $484.9 million for the second quarter
of 2008. The decrease was primarily due to a decrease in net
revenues for the Harland Clarke segment of $22.7 million. Non-GAAP
adjusted net income was $23.6 million for the second quarter of
2009, or $1.22 per non-GAAP diluted share, excluding the impact of
a gain on early extinguishment of debt. Net income increased by
$9.8 million, or 50.8% to $29.1 million for the second quarter of
2009, or $1.50 per diluted share, from $19.3 million, or $0.92 per
diluted share, for the second quarter of 2008. Net income for the
second quarter of 2009 includes 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 Corp.
Senior Notes for aggregate consideration of $14.6 million. The
increase in net income and earnings per share also reflects a
decrease in interest expense of $8.9 million ($5.4 million after
tax), primarily due to lower interest rates on variable rate debt,
and an increase in restructuring costs of $9.7 million ($5.9
million after tax). The increase in earnings per share also
reflects fewer weighted average shares of common stock outstanding
due to the Company's repurchase of 2.0 million shares in the second
quarter of 2008. Adjusted EBITDA decreased by $0.4 million, or
0.3%, to $125.9 million for the second quarter of 2009 from $126.3
million for the second quarter of 2008. 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 $22.7 million,
or 6.9%, to $306.3 million for the second quarter of 2009 from
$329.0 million for the second quarter of 2008. The decrease in net
revenues was primarily due to volume declines from check and
related products, which the Company believes was partially affected
by the economic downturn. Declines in volumes were partially offset
by increased revenues per unit. Additionally, there was $0.1
million of revenue for contract termination fees for the second
quarter of 2009 compared to $2.2 million for the second quarter of
2008. Operating income for the Harland Clarke segment decreased by
$10.8 million, or 17.1%, to $52.3 million for the second quarter of
2009 from $63.1 million for the second quarter of 2008. The
decrease in operating income was largely driven by a $10.7 million
increase in restructuring costs and a $2.1 million reduction in
contract termination fees. Volume declines and increases in
delivery expenses were essentially offset by increased revenues per
unit, labor cost reductions and a decrease in integration-related
expenses. Operating income for the second quarter of 2009 and 2008
includes restructuring costs of $11.1 million and $0.4 million,
respectively. Net revenues for the Harland Financial Solutions
segment decreased by $4.2 million, or 5.7%, to $69.7 million for
the second quarter of 2009 from $73.9 million for the second
quarter of 2008. Net revenues from the risk management product
lines increased $0.6 million, primarily due to organic growth in
lending products. Net revenues from the enterprise solutions
product lines decreased $4.8 million, primarily due to declines in
license, hardware, and professional services revenues, which the
Company believes was partially affected by the economic downturn.
Operating income for the Harland Financial Solutions segment
increased by $4.8 million, or 75.0%, to $11.2 million for the
second quarter of 2009 from $6.4 million for the second quarter of
2008. The increase in operating income was primarily due to labor
cost reductions, a $2.1 million decrease in restructuring costs and
a $1.5 million reduction in compensation expense related to an
incentive agreement from an acquisition, partially offset by the
decrease in net revenues. 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. Operating income for second
quarter of 2008 includes charges of $2.6 million for compensation
expense related to an incentive agreement from an acquisition and
$2.9 million for restructuring costs. Net revenues for the Scantron
segment decreased by $4.0 million, or 7.3%, to $50.7 million for
the second quarter of 2009 from $54.7 million for the second
quarter of 2008. The decrease in net revenues was primarily due to
sales declines in hardware and forms products, which the Company
believes was partially affected by the economic downturn. Declines
were partially offset by organic growth in software products.
Operating income for the Scantron segment increased by $2.2
million, or 48.9%, to $6.7 million in the second quarter of 2009
from $4.5 million in the second quarter of 2008. The increase in
operating income was primarily due to cost reductions related to
the Data Management acquisition, partially offset by volume
declines and a $1.1 million increase in restructuring costs.
Operating income for the second quarter of 2009 and 2008 includes
restructuring costs of $1.7 million and $0.6 million, respectively.
Net revenues for the Licorice Products segment, operated by Mafco
Worldwide, decreased by $2.0 million, or 7.3%, to $25.5 million for
the second quarter of 2009 from $27.5 million for the second
quarter of 2008. The decline in net revenues was due to lower
shipment volumes for all of Mafco Worldwide's products, primarily
from order shipment timing, continued worldwide consumption
declines in tobacco products using licorice and the rationalization
of inventories by Altria Inc. ("Altria") and Philip Morris
International, Inc. ("PMI") subsequent to Altria's spin-off of PMI
last year. Operating income for the Licorice Products segment
decreased by $2.3 million, or 22.5%, to $7.9 million for the second
quarter of 2009 from $10.2 million for the second quarter of 2008.
The decrease in operating income was primarily due to the decline
in net revenues and increased raw material costs. First Half 2009
Performance Consolidated Results Consolidated net revenues
decreased by $40.7 million, or 4.3%, to $916.2 million for the six
months ended June 30, 2009 from $956.9 million for the six months
ended June 30, 2008. The decrease was primarily due to a decrease
in net revenues for the Harland Clarke segment of $39.7 million,
partially offset by an increase in net revenues of $14.6 million
due to the acquisition of Data Management I LLC by Scantron on
February 22, 2008. Non-GAAP adjusted net income was $42.4 million
for the six months ended June 30, 2009, or $2.19 per non-GAAP
diluted share, excluding the impact of a gain on early
extinguishment of debt. Net income increased by $48.6 million, or
152.8%, to $80.4 million, or $4.14 per diluted share, for the six
months ended June 30, 2009 from $31.8 million, or $1.50 per diluted
share, for the six months ended June 30, 2008. Net income for the
six months ended June 30, 2009 includes 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 Corp. Senior Notes for aggregate consideration of $49.7
million. The increase in net income and earnings per share also
reflects a decrease in interest expense of $21.8 million ($13.3
million after tax), primarily due to lower interest rates on
variable rate debt and an increase in restructuring costs of $19.4
million ($11.8 million after tax). The increase in earnings per
share also reflects fewer weighted average shares of common stock
outstanding due to the Company's repurchase of 2.0 million shares
in the second quarter of 2008. Adjusted EBITDA increased by $4.8
million, or 2.0%, to $248.2 million for the six months ended June
30, 2009 from $243.4 million for the six months ended June 30,
2008. 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 $39.7 million, or 6.0%, to $621.4 million for the six
months ended June 30, 2009 from $661.1 million for the six months
ended June 30, 2008. The decrease in net revenues was primarily due
to volume declines from check and related products, which the
Company believes was partially affected by the economic downturn,
as well as one less production day in the 2009 period. Declines in
volumes were partially offset by increased revenues per unit.
Additionally, there was $0.4 million of revenue from contract
termination fees for the six months ended June 30, 2009 compared to
$2.2 million for the six months ended June 30, 2008. Operating
income for the Harland Clarke segment decreased by $13.2 million,
or 11.3%, to $103.2 million for the six months ended June 30, 2009
from $116.4 million for the six months ended June 30, 2008. The
decrease in operating income was largely driven by a $17.6 million
increase in restructuring costs and a $1.8 million reduction in
contract termination fees. Volume declines and increases in
delivery expenses were essentially offset by increased revenues per
unit, labor cost reductions and a decrease in integration-related
expenses. Operating income for the six months ended June 30, 2009
and 2008 includes restructuring costs of $18.4 million and $0.8
million, respectively. Net revenues for the Harland Financial
Solutions segment decreased by $6.2 million, or 4.3%, to $138.9
million for the six months ended June 30, 2009 from $145.1 million
for the six months ended June 30, 2008. Net revenues from the risk
management product lines increased $0.4 million, primarily due to
organic growth in lending products, partially offset by declines in
mortgage products. Net revenues from the enterprise solutions
product lines decreased $6.6 million, primarily due to a decline in
license, hardware, and professional services revenues, which the
Company believes was partially affected by the economic downturn.
Operating income for the Harland Financial Solutions segment
increased by $5.8 million, or 45.3%, to $18.6 million for the six
months ended June 30, 2009 from $12.8 million for the six months
ended June 30, 2008. The increase in operating income was primarily
due to labor cost reductions and a $3.0 million decrease in
compensation expense related to an incentive agreement for an
acquisition, partially offset by the decrease in net revenues.
Operating income for the six months ended June 30, 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. Operating income for the six months ended June
30, 2008 includes charges of $5.1 million for compensation expense
related to an incentive agreement from an acquisition and $2.9
million for restructuring costs. Net revenues for the Scantron
segment increased by $8.8 million, or 9.1%, to $105.1 million for
the six months ended June 30, 2009 from $96.3 million for the six
months ended June 30, 2008. The Data Management acquisition
accounted for an increase of $14.6 million. The remaining $5.8
million decrease in net revenues was due to sales declines in
hardware and forms products, which the Company believes were
partially affected by the economic downturn, partially offset by
organic growth in software products. Operating income for the
Scantron segment increased by $3.3 million, or 32.4%, to $13.5
million for the six months ended June 30, 2009 from $10.2 million
for the six months ended June 30, 2008. The increase in operating
income was partially due to the Data Management acquisition, which
accounted for an increase of $1.8 million. The remaining $1.5
million increase was primarily due to cost reduction activities
related to the Data Management acquisition and a decrease in
integration-related expenses, partially offset by volume declines
and a $1.5 million increase in restructuring costs. The six months
ended June 30, 2009 includes $1.3 million in one-time expenses
related to a contractual obligation owing to a former employee upon
termination of employment. Operating income for the six months
ended June 30, 2009 and 2008 includes restructuring costs of $3.1
million and $1.6 million, respectively. Net revenues for the
Licorice Products segment, operated by Mafco Worldwide, decreased
by $3.8 million, or 6.9%, to $51.2 million for the six months ended
June 30, 2009 from $55.0 million for the six months ended June 30,
2008. The decline in net revenues was due to lower shipment volumes
for all of Mafco Worldwide's products, primarily from order
shipment timing, continued worldwide consumption declines in
tobacco products using licorice and the rationalization of
inventories by Altria and PMI subsequent to Altria's spin-off of
PMI last year. Operating income for the Licorice Products segment
decreased by $3.8 million, or 18.9%, to $16.3 million for the six
months ended June 30, 2009 from $20.1 million for the six months
ended June 30, 2008. The decrease in operating income was primarily
due to the decline in net revenues and increased raw material
costs. 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
provides checks and related products and direct marketing services
to financial institutions and their customers. The operations of
Harland Financial Solutions include core processing, retail and
lending software solutions. Scantron is a leading provider of data
management solutions and testing and assessment products and
services sold primarily to educational and commercial customers.
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) economic, regulatory or political conditions
that have an impact on the worldwide tobacco industry or on the
consumption of tobacco products in which licorice products are
used; (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;
and (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. You should read carefully the factors described in M
& F Worldwide's Annual Report on Form 10-K for the year ended
December 31, 2008 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. Adjusted Net Income Adjusted
net income represents GAAP net income, adjusted to eliminate the
gain on early extinguishment of debt and related taxes from the
repurchases of Harland Clarke Holdings Corp. Senior Notes at a
discount to their principal amount. M & F Worldwide is
presenting adjusted net income as a measure of its financial
performance because it believes presenting adjusted net income will
allow investors to better understand the operating results of M
& F Worldwide, since the gain on early extinguishment of debt
does not result from changes in the underlying business operations
of M & F Worldwide. Management of M & F Worldwide uses
adjusted net income to evaluate the operational results and
financial performance of M & F Worldwide in a manner similar to
the manner in which it uses GAAP net income. EBITDA and Adjusted
EBITDA 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 nonrecurring 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, deferred
purchase price compensation related to an acquisition and
non-recurring purchase 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 Six Months
Ended June 30, June 30, ------------------ ---------------- 2009
2008 2009 2008 ---- ---- ---- ---- Product revenues, net $377.4
$407.8 $766.2 $810.1 Service revenues, net 74.5 77.1 150.0 146.8
------ ------ ------ ------ Total net revenues 451.9 484.9 916.2
956.9 Cost of products sold 225.2 242.2 460.4 489.2 Cost of
services provided 38.0 40.2 77.9 76.2 ------ ------ ------ ------
Total cost of revenues 263.2 282.4 538.3 565.4 ------ ------ ------
------ Gross profit 188.7 202.5 377.9 391.5 Selling, general and
administrative expenses 105.1 122.3 214.9 240.8 Restructuring costs
13.6 3.9 24.7 5.3 ------ ------ ------ ------ Operating income 70.0
76.3 138.3 145.4 Interest income 0.4 0.6 0.9 2.8 Interest expense
(36.2) (45.1) (74.8) (96.6) Gain on early extinguishment of debt
8.9 - 61.5 - Other (expense) income, net (0.1) 0.3 0.8 1.3 ------
------ ------ ------ Income before income taxes and extraordinary
gain 43.0 32.1 126.7 52.9 Provision for income taxes 13.9 13.5 46.3
21.8 ------ ------ ------ ------ Net income before extraordinary
gain 29.1 18.6 80.4 31.1 Extraordinary gain - 0.7 - 0.7 ------
------ ------ ------ Net income $29.1 $19.3 $80.4 $31.8 ======
====== ====== ====== Earnings per common share before extraordinary
gain: Basic $1.51 $0.88 $4.16 $1.46 ====== ====== ====== ======
Diluted $1.50 $0.88 $4.14 $1.46 ====== ====== ====== ======
Extraordinary gain per common share: Basic $- $0.04 $- $0.04 ======
====== ====== ====== Diluted $- $0.04 $- $0.04 ====== ====== ======
====== Earnings per common share: Basic $1.51 $0.92 $4.16 $1.50
====== ====== ====== ====== Diluted $1.50 $0.92 $4.14 $1.50 ======
====== ====== ====== Weighted average number of shares used in per
share calculations: Basic shares 19.3 20.9 19.3 21.0 ==== ==== ====
==== Diluted shares 19.3 20.9 19.3 21.0 ==== ==== ==== ==== M &
F Worldwide Corp. and Subsidiaries Business Segment Information (in
millions) (unaudited) -------------------------------------- Three
Months Ended Six months Ended June 30, June 30, ------------------
----------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net
revenues Harland Clarke segment $306.3 $329.0 $621.4 $661.1 Harland
Financial Solutions segment 69.7 73.9 138.9 145.1 Scantron segment
50.7 54.7 105.1 96.3 Licorice Products segment 25.5 27.5 51.2 55.0
Eliminations (0.3) (0.2) (0.4) (0.6) ------ ------ ------ ------
Total net revenues $451.9 $484.9 $916.2 $956.9 ====== ====== ======
====== Operating income Harland Clarke segment $52.3 $63.1 $103.2
$116.4 Harland Financial Solutions segment 11.2 6.4 18.6 12.8
Scantron segment 6.7 4.5 13.5 10.2 Licorice Products segment 7.9
10.2 16.3 20.1 Corporate (8.1) (7.9) (13.3) (14.1) ------ ------
------ ------ Total operating income $70.0 $76.3 $138.3 $145.4
====== ====== ====== ====== Reconciliation of net income to
Non-GAAP adjusted net income (in millions, except per share
amounts): (unaudited) ------------------------ Three Months Six
Months Ended Ended June 30, June 30, 2009 2009 -------- --------
Net income $29.1 $80.4 Less: gain on early extinguishment of debt,
net of taxes of $3.4 and $23.5, respectively (a) (5.5) (38.0) -----
---- Non-GAAP adjusted net income $23.6 $42.4 ===== ===== Diluted
non-GAAP net income per share $1.22 $2.19 ===== ===== Diluted GAAP
net income per share $1.50 $4.14 ===== ===== Weighted average
number of shares used in per share calculations 19.3 19.3 =====
===== (a) Reflects gain from the purchase of Harland Clarke
Holdings bonds at less than their principal amount. Reconciliation
of net income to EBITDA and EBITDA to Adjusted EBITDA (in
millions): (unaudited) -------------------------------------- Three
Months Ended Six Months Ended June 30, June 30, ------------------
---------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net income
$29.1 $19.3 $80.4 $31.8 Interest expense, net 35.8 44.5 73.9 93.8
Provision for income taxes 13.9 13.5 46.3 21.8 Depreciation and
amortization 41.2 42.1 82.0 83.6 ------ ------ ------ ------ EBITDA
120.0 119.4 282.6 231.0 Adjustments: Restructuring costs (a) 13.6
3.9 24.7 5.3 Deferred purchase price compensation (b) 1.1 2.6 2.1
5.1 Impairment of intangible assets (c) - 0.5 - 0.5 Gain on early
extinguishment of debt (d) (8.9) - (61.5) - Extraordinary gain (e)
- (0.7) - (0.7) Impact of purchase accounting adjustments (f) 0.1
0.6 0.3 2.2 ------ ------ ------ ------ Adjusted EBITDA $125.9
$126.3 $248.2 $243.4 ====== ====== ====== ====== (a) Reflects
restructuring costs, including adjustments, recorded in accordance
with GAAP, consisting primarily of severance, post-closure facility
expenses and other related expenses, which were not recorded in
purchase accounting. (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 a non-cash impairment charge from
the write-down of Alcott Routon intangible assets. (d) Reflects
gain from the purchase of Harland Clarke Holdings bonds at less
than their principal amount. (e) Reflects a non-recurring
extraordinary gain. (f) Reflects the non-cash fair value deferred
revenue and inventory adjustments related to purchase accounting.
DATASOURCE: M & F Worldwide Corp. CONTACT: Christine Taylor, M
& F Worldwide Corp., +1-212-572-5988
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