M & F Worldwide Corp. to Hold Conference Call on March 10, 2009
NEW YORK, Feb. 27 /PRNewswire-FirstCall/ -- M & F Worldwide Corp. (NYSE: MFW) today reported results for the fourth quarter and year ended December 31, 2008. 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 ended December 31, 2008 results on March 10, 2009 at 9:30 a.m. (EDT). The conference call will be accessible by dialing (800) 611-1147 in the United States and (612) 332-0228 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: 987305. The replay will be available from 11:30 a.m. (EDT) Tuesday, March 10, 2009 through 11:59 p.m. (EDT) Tuesday, March 24, 2009.
As previously announced, on May 1, 2007, M & F Worldwide (the 'Company') completed the acquisition of John H. Harland Company ('Harland') and related financing transactions. As a result of the acquisition of Harland (the 'Harland Acquisition'), M & F Worldwide has four business segments, which are operated by Harland Clarke (which is the combination of Clarke American's check printing, contact center and direct marketing capabilities with Harland's corresponding businesses), Harland Financial Solutions, Scantron and Mafco Worldwide.
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 December 31, 2008, Harland Clarke Holdings has exceeded the previously disclosed 24-month synergy plan, having taken actions to realize in excess of the $112.6 million of pro forma anticipated run rate synergy target. Harland Clarke Holdings has realized approximately $94.0 million of EBITDA improvement from such actions, of which approximately $30.0 million represents EBITDA improvement for 2007 and approximately $64.0 million represents EBITDA improvement for 2008.
Fourth Quarter 2008 Performance
Consolidated Results
Consolidated net revenues increased by $8.2 million to $467.0 million for the fourth quarter of 2008 from $458.8 million for the fourth quarter of 2007, as a result of the Data Management Acquisition, which accounted for an increase of $25.7 million. Net income for the fourth quarter of 2008 was $15.8 million, as compared to $11.5 million for the fourth quarter of 2007. Net income for the fourth quarter of 2008 includes $8.9 million ($5.4 million after tax) for restructuring costs, $0.9 million ($0.5 million after tax) for compensation expense related to an incentive agreement for the Peldec assets purchase, which was completed in August 2007, 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. Net income for the fourth 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, $2.6 million ($1.6 million after tax) for compensation expense related to an incentive agreement for the Peldec assets purchase and $0.7 million ($0.4 million after tax) for restructuring costs. For the fourth quarter of 2008, Adjusted EBITDA increased by $4.0 million to $123.6 million as compared to $119.6 million for the fourth 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.
Basic and diluted earnings per common share were $0.82 for the fourth quarter of 2008 compared to basic and diluted earnings per common share of $0.54 for the fourth quarter of 2007.
Segment Results
Net revenues for the Harland Clarke segment decreased by $24.6 million to $306.6 million for the fourth quarter of 2008 from $331.2 million for the fourth quarter of 2007. The decrease is primarily due to volume declines in check and related products, partially offset by higher revenues per unit, as well as declines in marketing services products. In addition, revenues for the fourth quarter of 2007 include a $7.7 million one-time non-cash increase in revenues. Operating income for the Harland Clarke segment decreased by $14.5 million to $43.8 million for the fourth quarter of 2008 from $58.3 million for the fourth quarter of 2007. The decrease in operating income was largely driven by the decrease in revenues, an increase in restructuring expenses of $7.2 million, an increase in integration expenses, and a decrease in gains from the disposal of fixed assets of $1.5 million. Operating income for the fourth quarter of 2008 and 2007 includes charges of $7.9 million and $0.7 million, respectively, for restructuring costs.
Net revenues for the Harland Financial Solutions segment increased by $5.5 million to $75.8 million for the fourth quarter of 2008 from $70.3 million for the fourth quarter of 2007. The increase includes $2.4 million of organic growth in the enterprise solutions product line. Net revenues also include charges of $0.1 million and $3.6 million in the fourth quarter of 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 $5.9 million to $13.3 million for the fourth quarter of 2008 from $7.4 million for the fourth quarter of 2007, primarily due to the revenue increase and labor cost reductions, partially offset by a $1.3 million increase in amortization of intangible assets related to the Harland Acquisition. Operating income for the fourth quarter of 2008 also includes charges of $0.9 million for compensation expense related to an incentive agreement for the Peldec assets purchase, and $0.9 million for restructuring costs. Operating income for the fourth quarter of 2007 includes a charge of $2.5 million for compensation expense related to an incentive agreement for the Peldec assets purchase.
Net revenues for the Scantron segment increased by $24.5 million to $56.4 million for the fourth quarter of 2008, from $31.9 million for the fourth quarter of 2007 primarily as a result of the Data Management Acquisition, which accounted for an increase of $25.7 million. Operating income for the Scantron segment increased by $2.4 million to $9.1 million in the fourth quarter of 2008 from $6.7 million in the fourth quarter of 2007. The increase is due to the Data Management Acquisition, which accounted for an increase of $4.2 million. The remaining $1.8 million decrease was primarily due to integration expenses. Operating income for the fourth 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 $0.1 million for restructuring costs. Operating income for the fourth quarter of 2007 includes charges of $0.6 million for non-cash fair value purchase accounting adjustments to deferred revenue and inventory related to the Harland Acquisition.
Net revenues for the Licorice Products segment, operated by Mafco Worldwide, increased by $2.4 million to $28.3 million for the fourth quarter of 2008 from $25.9 million for the fourth quarter of 2007. This was primarily due to increased shipment volumes to worldwide tobacco customers as the result of a difference in the timing of shipments made during 2008 versus 2007 and an increase in Magnasweet and licorice derivative shipment volumes. Operating income for the Licorice Products segment was $10.2 million for the fourth quarter of 2008 as compared to $9.4 million for the fourth quarter of 2007. The increase in operating income of $0.8 million was primarily due to the increase in net revenues partially offset by higher raw material costs.
Full Year 2008 Performance
Consolidated Results
Consolidated net revenues increased by $433.4 million to $1,906.2 million for the year ended December 31, 2008 from $1,472.8 million for 2007, primarily as a result of the Harland Acquisition, which accounted for an increase of $345.1 million and the Data Management Acquisition, which accounted for an increase of $88.5 million. Net income for 2008 was $67.7 million, as compared to a net loss of $4.2 million for 2007. Net income for 2008 includes pre-tax charges of $15.6 million ($9.5 million after tax) for restructuring costs, $8.1 million ($4.9 million after tax) for compensation expense related to an incentive agreement for the Peldec assets purchase, $3.0 million ($1.8 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 $0.5 million ($0.3 million after tax) due to an impairment of Alcott Routon intangible assets. The net loss for 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.
