Harland Clarke Holdings Corp. to Participate in M & F Worldwide Corp. Conference Call on August 13, 2008

DECATUR, Ga., Aug. 8 /PRNewswire/ -- Harland Clarke Holdings Corp. ('Harland Clarke Holdings' or the 'Company'), formerly known as Clarke American Corp., today reported results for the second quarter and six months ended June 30, 2008. In addition to the Harland Clarke Holdings Form 10-Q filed with the Securities and Exchange Commission today, Harland Clarke Holdings' financial results are also consolidated in the quarterly report on Form 10-Q filed today by M & F Worldwide Corp. (NYSE: MFW), which is the indirect parent company of Harland Clarke Holdings.

M & F Worldwide Corp. will host a conference call to discuss its second quarter and six months ended June 30, 2008 results, including results for Harland Clarke Holdings, on August 13, 2008, at 9:00 a.m. (EDT). The conference call will be accessible by dialing (888) 423-3275 in the U.S. and (612) 332-0725 internationally. For those unable to listen live, a replay of the call will be available by dialing (800) 475-6701 in the U.S. and (320) 365-3844 internationally; Access Code: 954347. The replay will be available from 11:00 a.m. (EDT), Wednesday, August 13, 2008, through 11:59 p.m. (EDT), Wednesday, August 27, 2008.

As previously announced, on May 1, 2007, M & F Worldwide Corp. completed the acquisition of John H. Harland Company ('Harland') and related financing transactions. Upon the completion of the acquisition, Harland became a wholly owned subsidiary of Clarke American Corp., which was then renamed Harland Clarke Holdings Corp. As a result of the acquisition of Harland ('Harland Acquisition'), Harland Clarke Holdings now has three business segments -- Harland Clarke (which is the combination of Clarke American Corp.'s check printing, contact center and direct marketing capabilities with Harland's corresponding businesses), Harland Financial Solutions and Scantron.

As previously announced, on February 22, 2008, the Company's wholly owned subsidiary, Scantron Corporation, purchased all of the limited liability membership interests of Data Management I LLC ('Data Management'), from NCS Pearson for $218.7 million in cash, after giving effect to working capital adjustments of $1.6 million, which were paid to the Company in July 2008 (the 'Data Management Acquisition'). Data Management designs, manufactures and services scannable data collection products, including printed forms, scanning equipment and related software, and provides survey consulting and tracking services, including medical device tracking, as well as field maintenance services to corporate and governmental clients. Data Management's results of operations have been included in the Company's results of operations since February 22, 2008.

Through June 30, 2008 Harland Clarke Holdings has taken actions to achieve approximately $102.3 million of its Harland Acquisition related synergy targets, on an annual basis. As a result of these actions, Harland Clarke Holdings has realized approximately $19.6 million and $36.9 million of EBITDA improvement in the second quarter and six months ended June 30, 2008, respectively. Harland Clarke Holdings believes that it is on track to achieve cost reduction targets previously disclosed in connection with the financing for the Harland Acquisition.

Second Quarter 2008 Performance

Consolidated Results

Consolidated net revenues increased by $117.8 million to $457.4 million in the second quarter of 2008 from $339.6 million in the second quarter of 2007, primarily as a result of the Harland Acquisition which accounted for $82.1 million of the increase and the Data Management Acquisition which accounted for $25.8 million of the increase. Net income for the second quarter of 2008 was $14.6 million, as compared to a net loss of $37.5 million for the second quarter of 2007. The net income for the second quarter of 2008 includes pre-tax charges of $0.6 million ($0.4 million after tax) for non-cash fair value purchase accounting adjustments to deferred revenue and inventory related to the Harland and Data Management Acquisitions and $3.9 million ($2.4 million after tax) for restructuring costs. The net loss for the second quarter of 2007 includes a non-recurring pre-tax loss on early extinguishment of debt of $54.6 million ($34.1 million after tax) related to refinancing transactions completed in connection with the Harland Acquisition. The net loss for the second quarter of 2007 also includes pre-tax charges of $8.6 million ($5.2 million after tax) for non-cash fair value purchase accounting adjustments to deferred revenue and inventory related to the Harland Acquisition and $1.7 million ($1.0 million after tax) for restructuring costs. For the second quarter of 2008, Adjusted EBITDA increased by $34.0 million to $119.1 million as compared to $85.1 million for the second quarter of 2007 primarily as a result of the Harland Acquisition which accounted for $22.9 million of the increase and the Data Management Acquisition which accounted for $4.9 million of the increase. Adjusted EBITDA is a non-GAAP measure that is defined in the footnotes to this release and which is reconciled to net income, the most directly comparable GAAP measure, in the accompanying financial tables.

Segment Results

Net revenues from the Harland Clarke segment increased by $52.7 million to $329.0 million for the second quarter of 2008 from $276.3 million in the second quarter of 2007, primarily as a result of the Harland Acquisition which accounted for $49.5 million of the increase. The remaining $3.2 million of the increase was primarily due to higher revenues per unit, partially offset by a decline in units. Operating income for the Harland Clarke segment increased by $19.1 million to $63.1 million for the second quarter of 2008 from $44.0 million for the second quarter of 2007, of which the Harland Acquisition accounted for $10.2 million of the increase. The remaining $8.9 million was largely related to growth in revenue and cost reductions in labor and facilities expenses more than offsetting increased integration related costs.

Net revenues from the Harland Financial Solutions segment increased by $28.7 million to $73.9 million for the second quarter of 2008 from $45.2 million in the second quarter of 2007, primarily as a result of the Harland Acquisition which accounted for $23.5 million of the increase. The remaining $5.2 million of the increase was primarily due to a $2.9 million difference in the fair value adjustment to deferred revenue and organic growth in the risk management and enterprise solutions product lines. Operating income for the Harland Financial Solutions segment increased by $3.8 million to $6.4 million for the second quarter of 2008 from $2.6 million in the second quarter of 2007, partially as a result of the Harland Acquisition which accounted for $1.8 million of the increase. Operating income for the Harland Financial Solutions segment for the second quarter of 2008 includes pre-tax charges of $0.2 million ($0.1 million after tax) for non-cash fair value purchase accounting adjustments to deferred revenue related to the Harland Acquisition and $2.6 million ($1.6 million after tax) for compensation expense related to an incentive agreement for the Peldec assets purchase. Operating income for the Harland Financial Solutions segment for the second quarter of 2007 includes pre-tax charges of $3.1 million ($1.9 million after tax) for non-cash fair value purchase accounting adjustments to deferred revenue related to the Harland Acquisition.

Net revenues from the Scantron segment increased by $36.4 million to $54.7 million for the second quarter of 2008 from $18.3 million in the second quarter of 2007, primarily as a result of the Data Management Acquisition which accounted for $25.8 million of the increase and the Harland Acquisition which accounted for $9.3 million of the increase. The remaining $1.3 million of the increase was primarily due to a $0.6 million difference in the fair value adjustment of deferred revenues and organic growth, primarily in K-12 software. Operating income for the Scantron segment increased by $6.3 million to $4.5 million in the second quarter of 2008 from an operating loss of $1.8 million in the second quarter of 2007, primarily as a result of the Harland Acquisition which accounted for $1.1 million of the increase, and the Data Management Acquisition which accounted for $1.8 million of the increase and decrease in by non-cash purchase accounting adjustments, discussed below. Operating income for the Scantron segment for the second quarter of 2008 includes pre-tax charges of $0.4 million ($0.3 million after tax) for non-cash fair value purchase accounting adjustments to deferred revenue and inventory, related to the Harland and Data Management Acquisitions. Operating income for the Scantron segment for the second quarter of 2007 includes pre-tax charges of $3.8 million ($2.3 million after tax) for non-cash fair value purchase accounting adjustments to deferred revenue and inventory, related to the Harland Acquisition.

First Half 2008 Performance

Consolidated Results

Consolidated net revenues increased by $397.7 million to $901.9 million in the six months ended June 30, 2008 from $504.2 million for the six months ended June 30, 2007, primarily as a result of the Harland Acquisition which accounted for $345.1 million of the increase and the Data Management Acquisition which accounted for $36.6 million of the increase. Net income for the six months ended June 30, 2008 was $21.8 million, as compared to a net loss of $32.4 million for the six months ended June 30, 2007. The net income for the six months ended June 30, 2008 includes pre-tax charges of $2.2 million ($1.3 million after tax) related to non-cash fair value purchase accounting adjustments to deferred revenue and inventory related to the Harland and Data Management Acquisitions and $5.3 million ($3.2 million after tax) for restructuring costs.