Harland Clarke Holdings Corp. to Participate in M & F Worldwide Corp. Conference Call on November 12, 2008

DECATUR, Ga., Nov. 3 /PRNewswire-FirstCall/ -- Harland Clarke Holdings Corp. ('Harland Clarke Holdings' or the 'Company') today reported results for the third quarter and nine months ended September 30, 2008. In addition to the Harland Clarke Holdings quarterly report on 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 will host a conference call to discuss its third quarter and nine months ended September 30, 2008 results on November 12, 2008, at 9:00 a.m. (EST). The conference call will be accessible by dialing (800) 288-8960 in the U.S. 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 U.S. and (320) 365-3844 internationally; Access Code: 965757. The replay will be available from 11:00 a.m. (EST) Wednesday, November 12, 2008, through 11:59 p.m. (EST) Wednesday, November 26, 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 (the 'Harland Acquisition'), Harland Clarke Holdings 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.

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 (the 'Data Management Acquisition').

Operating results of the Company include the results of acquired businesses from their respective dates of acquisition.

In connection with the Harland Acquisition, Harland Clarke disclosed its pro forma anticipated run-rate synergy target of $106.4 million to be achieved within 18 months of the Harland Acquisition and $112.6 million within 24 months of the Harland Acquisition. Through September 30, 2008, Harland Clarke Holdings has exceeded the previously disclosed 18-month synergy plan, having taken actions to achieve approximately $110.2 million of its Harland Acquisition related synergy targets. As a result of these actions, Harland Clarke Holdings has realized approximately $26.2 million and $82.2 million of EBITDA improvement in the third quarter and nine months ended September 30, 2008, respectively. The incremental year-over-year impact of these actions was $15.3 million and $52.2 million of EBITDA improvement in the third quarter and nine months ended September 30, 2008, respectively.

Third Quarter 2008 Performance

Consolidated Results

Consolidated net revenues increased by $21.2 million to $454.0 million in the third quarter of 2008 from $432.8 million in the third quarter of 2007, as a result of the Data Management Acquisition, which accounted for an increase of $26.1 million. Net income for the third quarter of 2008 was $15.5 million, as compared to $7.5 million for the third quarter of 2007. The net income for the third quarter of 2008 includes pre-tax charges of $2.1 million ($1.3 million after tax) for compensation expense related to an incentive agreement for the Peldec assets purchase, which was completed in August 2007, $1.4 million ($0.9 million after tax) for restructuring costs and $0.4 million ($0.2 million after tax) for non-cash fair value purchase accounting adjustments to deferred revenue related to the Harland and Data Management acquisitions. The net income for the third quarter of 2007 includes pre-tax charges of $4.0 million ($2.4 million after tax) for non-cash fair value purchase accounting adjustments to deferred revenue and inventory related to the Harland Acquisition, $3.1 million ($1.9 million after tax) due to an impairment of Alcott Routon intangible assets, $2.0 million ($1.2 million after tax) for restructuring costs and $0.8 million ($0.5 million after tax) for compensation expense related to an incentive agreement for the Peldec assets purchase. For the third quarter of 2008, Adjusted EBITDA increased by $1.8 million to $116.0 million as compared to $114.2 million for the third quarter of 2007. Adjusted EBITDA is a non-GAAP measure that is defined in the footnotes to this release and 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 decreased by $9.7 million to $322.7 million for the third quarter of 2008 from $332.4 million in the third quarter of 2007. The decline is primarily a result of decreased unit volume, partially offset by one extra production day in the third quarter of 2008 and higher revenues per unit. Operating income for the Harland Clarke segment increased by $1.6 million to $57.0 million for the third quarter of 2008 from $55.4 million for the third quarter of 2007, largely driven by labor cost reductions and the extra production day, partially offset by lower volumes and increases in delivery expenses. Operating income in the third quarter of 2008 includes a charge of $0.6 million for restructuring costs. Operating income in the third quarter of 2007 includes a $3.1 million non-cash impairment charge from the write down of Alcott Routon intangible assets, $2.0 million of restructuring costs and $0.2 million for non-cash fair value purchase accounting adjustments to deferred revenue related to the Harland Acquisition.

Net revenues from the Harland Financial Solutions segment increased by $5.3 million to $72.8 million for the third quarter of 2008 from $67.5 million in the third quarter of 2007. The increase includes $2.3 million of organic growth in the risk management and enterprise solutions product lines. Net revenues also include charges of $0.1 million and $3.1 million in the three months ended September 30, 2008 and 2007, respectively, for non-cash fair value purchase accounting adjustments to deferred revenue related to the Harland Acquisition. Operating income for the Harland Financial Solutions segment increased by $1.2 million to $8.0 million for the third quarter of 2008 from $6.8 million in the third quarter of 2007, primarily due to the revenue increase and labor cost reductions, partially offset by a $2.4 million increase in amortization of intangible assets related to the Harland Acquisition. Operating income for the Harland Financial Solutions segment for the third quarter of 2008 also includes charges of $2.1 million for compensation expense related to an incentive agreement for the Peldec assets purchase, and $0.1 million for restructuring costs. Operating income for the Harland Financial Solutions segment for the third quarter of 2007 includes a charge of $0.8 million for compensation expense related to an incentive agreement for the Peldec assets purchase.

Net revenues from the Scantron segment increased by $25.2 million to $58.6 million for the third quarter of 2008, from $33.4 million in the third quarter of 2007 as a result of the Data Management Acquisition, which accounted for an increase of $26.1 million. Operating income for the Scantron segment increased by $1.5 million to $9.0 million in the third quarter of 2008 from $7.5 million in the third quarter of 2007. The increase is due to the Data Management Acquisition, which accounted for an increase of $3.8 million, partially offset by integration expenses. Operating income for the Scantron segment for the third quarter of 2008 includes charges of $0.3 million for non-cash fair value purchase accounting adjustments to deferred revenue related to the Data Management Acquisition and $0.7 million for restructuring costs. Operating income for the Scantron segment for the third quarter of 2007 includes charges of $0.7 million for non-cash fair value purchase accounting adjustments to deferred revenue and inventory related to the Harland Acquisition.

Year-To-Date 2008 Performance

Consolidated Results

Consolidated net revenues increased by $418.9 million to $1,355.9 million in the nine months ended September 30, 2008 from $937.0 million for the nine months ended September 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 $62.7 million of the increase. Net income for the nine months ended September 30, 2008 was $37.3 million, as compared to a net loss of $24.9 million for the nine months ended September 30, 2007.