Nov. 6, 2009 (PR Newswire) -- NEW YORK, Nov. 6 /PRNewswire-FirstCall/ -- M & F Worldwide Corp. ("M & F Worldwide" or the "Company") (NYSE: MFW) today reported results for the third quarter and nine months ended September 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 third quarter and year-to-date 2009 results on November 12, 2009, at 9:00 a.m. (EST). The conference call will be accessible by dialing (800) 230-1951 in the United States and (612) 288-0337 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: 120099. The replay will be available from 11:00 a.m. (EST) Thursday, November 12, 2009, through 11:59 p.m. (EST) Thursday, November 26, 2009.

Third Quarter 2009 Highlights

    --  Net revenues of $450.7 million, down 6.6% as compared to the third
quarter of 2008

    --  Operating income of $91.6 million, up 19.4% as compared to the third
quarter of 2008

    --  Non-GAAP adjusted net income of $36.2 million, or $1.87 per non-GAAP
diluted share, excluding the impact of a gain on early extinguishment of
debt

Third Quarter 2009 Performance

Consolidated Results

Consolidated net revenues decreased by $31.6 million, or 6.6%, to $450.7 million for the third quarter of 2009 from $482.3 million for the third quarter of 2008. The decrease was primarily due to a decrease in net revenues for the Harland Clarke segment of $17.7 million.

Non-GAAP adjusted net income was $36.2 million for the third quarter of 2009, or $1.87 per non-GAAP diluted share, excluding the impact of a gain on early extinguishment of debt. Net income increased by $16.4 million, or 81.6% to $36.5 million for the third quarter of 2009, or $1.88 per diluted share, from $20.1 million, or $1.04 per diluted share, for the third quarter of 2008. The increase in net income and earnings per share reflects an increase in operating income of $14.9 million ($9.1 million after tax), primarily due to reductions in selling, general and administrative expenses and a decrease in interest expense of $13.2 million ($8.1 million after tax), primarily due to lower interest rates on variable rate debt.

Adjusted EBITDA increased by $14.4 million, or 11.8%, to $136.8 million for the third quarter of 2009 from $122.4 million for the third 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 $17.7 million, or 5.5%, to $305.0 million for the third quarter of 2009 from $322.7 million for the third 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. Operating income for the Harland Clarke segment increased by $12.4 million, or 21.8%, to $69.4 million for the third quarter of 2009 from $57.0 million for the third quarter of 2008. The increase in operating income was largely driven by increased revenues per unit, reductions in labor costs, general overhead costs and integration-related costs, and a decrease in depreciation and amortization, which more than offset volume declines, inflation in delivery and material costs, and a $2.8 million increase in restructuring costs. Operating income for the third quarter of 2009 and 2008 includes restructuring costs of $3.4 million and $0.6 million, respectively.

Net revenues for the Harland Financial Solutions segment decreased by $4.9 million, or 6.7%, to $67.9 million for the third quarter of 2009 from $72.8 million for the third quarter of 2008. Net revenues from the enterprise solutions product lines decreased $3.0 million, primarily due to declines in license, hardware, and professional services revenues. Additionally, there was a decrease in early termination fees in the third quarter of 2009 as compared to the third quarter of 2008. Net revenues from the risk management product lines decreased $1.4 million, primarily due to declines in lending products. The Company believes the declines were partially affected by the economic downturn, which has negatively affected information technology purchases by financial institutions. Operating income for the Harland Financial Solutions segment increased by $1.5 million, or 18.8%, to $9.5 million for the third quarter of 2009 from $8.0 million for the third quarter of 2008. The increase in operating income was primarily due to labor cost reductions, decreases in general overhead costs, and a $1.3 million reduction in compensation expense related to an incentive agreement from an acquisition, partially offset by the decrease in net revenues and a $0.8 million increase in restructuring costs. Operating income for the third quarter of 2009 includes charges of $0.8 million for compensation expense related to an incentive agreement from an acquisition and $0.9 million for restructuring costs. Operating income for the third quarter of 2008 includes charges of $2.1 million for compensation expense related to an incentive agreement from an acquisition and $0.1 million for restructuring costs.

Net revenues for the Scantron segment decreased by $5.7 million, or 9.7%, to $52.9 million for the third quarter of 2009 from $58.6 million for the third quarter of 2008. The decrease in net revenues was primarily due to volume declines in hardware and forms products and a decrease in service and maintenance revenues. The Company believes these product lines and services were partially affected by the economic downturn. Operating income for the Scantron segment increased by $2.1 million, or 23.3%, to $11.1 million in the third quarter of 2009 from $9.0 million in the third quarter of 2008. The increase in operating income was primarily due to cost reductions and a decrease in integration-related costs from the Data Management acquisition and other restructuring activities and a $0.7 million decrease in restructuring costs, partially offset by volume declines. Operating income for the third quarter of 2008 includes restructuring costs of $0.7 million.

Net revenues for the Licorice Products segment, operated by Mafco Worldwide, decreased by $3.3 million, or 11.7%, to $25.0 million for the third quarter of 2009 from $28.3 million for the third 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 continued rationalization of inventories by Altria, Inc. ("Altria") and Philip Morris International, Inc. ("PMI") subsequent to Altria's spin-off of PMI in 2008. Operating income for the Licorice Products segment decreased by $1.1 million, or 12.1%, to $8.0 million for the third quarter of 2009 from $9.1 million for the third quarter of 2008. The decrease in operating income was primarily due to the decline in net revenues and increased raw material costs.

Year-to-Date 2009 Performance

Consolidated Results

Consolidated net revenues decreased by $72.3 million, or 5.0%, to $1,366.9 million for the nine months ended September 30, 2009 from $1,439.2 million for the nine months ended September 30, 2008. The decrease was primarily due to a decrease in net revenues for the Harland Clarke segment of $57.4 million, partially offset by an increase in net revenues of $14.6 million due to the acquisition of Data Management I LLC by the Scantron segment on February 22, 2008.

Non-GAAP adjusted net income was $78.6 million for the nine months ended September 30, 2009, or $4.07 per non-GAAP diluted share, excluding the impact of a gain on early extinguishment of debt. Net income increased by $65.0 million, or 125.2%, to $116.9 million, or $6.02 per diluted share, for the nine months ended September 30, 2009 from $51.9 million, or $2.52 per diluted share, for the nine months ended September 30, 2008. Net income for the nine months ended September 30, 2009 includes a $62.0 million ($38.3 million after tax) gain on early extinguishment of debt related to the purchase of $116.2 million principal amount of Harland Clarke Holdings Corp. Senior Notes for aggregate consideration of $50.6 million. The increase in net income and earnings per share also reflects a decrease in interest expense of $35.0 million ($21.4 million after tax), primarily due to lower interest rates on variable rate debt and an increase in operating income of $7.8 million ($4.8 million after tax), primarily due to reductions in selling, general and administrative expenses, partially offset by an increase in restructuring costs of $22.3 million ($13.6 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 $19.2 million, or 5.3%, to $385.0 million for the nine months ended September 30, 2009 from $365.8 million for the nine months ended September 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 $57.4 million, or 5.8%, to $926.4 million for the nine months ended September 30, 2009 from $983.8 million for the nine months ended September 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 nine months ended September 30, 2009. Declines in volumes were partially offset by increased revenues per unit. Additionally, there was $0.7 million of revenue from contract termination fees for the nine months ended September 30, 2009 compared to $2.3 million for the nine months ended September 30, 2008. Operating income for the Harland Clarke segment decreased by $0.8 million, or 0.5%, to $172.6 million for the nine months ended September 30, 2009 from $173.4 million for the nine months ended September 30, 2008. The decrease in operating income was largely driven by a $20.4 million increase in restructuring costs, volume declines, inflation in delivery and materials costs, one less production day in the nine months ended September 30, 2009 and a $1.6 million reduction in revenue from contract termination fees, which were essentially offset by increased revenues per unit, and reductions in labor costs, general overhead costs and integration-related costs. Operating income for the nine months ended September 30, 2009 and 2008 includes restructuring costs of $21.8 million and $1.4 million, respectively.

Net revenues for the Harland Financial Solutions segment decreased by $11.1 million, or 5.1%, to $206.8 million for the nine months ended September 30, 2009 from $217.9 million for the nine months ended September 30, 2008. Net revenues from the enterprise solutions product lines decreased $9.5 million, primarily due to declines in license, hardware, and professional services revenues. Additionally, there was a decrease in early termination fees for the nine months ended September 30, 2009 as compared to the nine months ended September 30, 2008.