M & F Worldwide Corporation Reports Income for 2006 First Quarter
New York, NY – May 5, 2006 – M & F Worldwide Corp., today reported results for the first
quarter ended March 31st, 2006.
Net revenues for the first quarter of 2006 were $187.2 million, as compared to $24.1
million in the first quarter of 2005. The Company’s revenues increased by $163.1 million in the
2006 quarter primarily as a result of the Clarke American acquisition which accounted for
$162.9 million of the increase. Net income was $10.4 million for the first quarter 2006, as
compared to $6.3 million for the first quarter 2005, an increase in net income of $4.1 million
over the prior year period. This increase is primarily due to the acquisition of Clarke American,
which accounted for $6.4 million of the increase, partially offset by interest on Mafco
Worldwide’s long-term debt incurred in connection with the acquisition of Clarke American.
Basic earnings per common share were $0.53 in the first quarter of 2006 and $0.33 in the first
quarter of 2005. Diluted earnings per common share were $0.52 in the first quarter of 2006 and
$0.31 in the first quarter of 2005.
Licorice Products Segment
Revenues from the Licorice Products segment operated by Mafco Worldwide increased
by $0.2 million, or 0.8%, to $24.3 million in the 2006 period from $24.1 million in the 2005
period. This increase was primarily due to an increase in sales to the worldwide tobacco industry
of $0.2 million and increased revenues from Magnasweet and licorice derivatives of $0.4
million, offset by a decline in revenues from sales to confectionary and other licorice customers
of $0.4 million. Operating income was $9.1 million in the 2006 period versus $9.6 million in the
2005 period. The decrease in operating income of $0.5 million was due to an increase in energy
and other manufacturing costs and increased professional fees in the 2006 period.
Financial Institution and Direct to Consumer Segments
Revenues and operating income for the Financial Institution segment included in the first
quarter of 2006 were $136.6 million and $22.1 million, respectively. Revenues and operating
income for the Direct to Consumer segment included in the first quarter of 2006 were $26.3
million and $3.0 million, respectively. In addition, M & F Worldwide’s operating income for the
first quarter reflects a non-recurring $1.3 million fair value adjustment to inventory recorded in
the purchase accounting for the acquisition of Clarke American.
About M & F Worldwide
M & F Worldwide has two business lines, which are operated by Mafco Worldwide and
Clarke American. Mafco Worldwide’s business is the production of licorice products for sale to
the tobacco, food, pharmaceutical and confectionery industries (which is the Company’s Licorice
Products segment). Clarke American’s business is providing checks, check-related products and
direct marketing services. Clarke American’s business consists of two segments: the Financial
Institution segment, which is focused on financial institution clients and their customers, and the
Direct to Consumer segment, which is focused on individual customers. For more information
on Clarke American, please see the Clarke American press release dated May 5, 2006.
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This press release contains forward-looking statements, within the meaning of the Private
Securities Litigation Reform Act of 1995, which involve risks and uncertainties. M & F
Worldwide's actual results may differ materially from those discussed in such forward-looking
statements. In addition to factors described in M & F Worldwide's Securities and Exchange
Commission filings and others (including in the Risk Factors set forth in the Annual Report
Form 10-K of M & F Worldwide filed with the Securities and Exchange Commission on March
15, 2006), the following factors could cause M & F Worldwide's actual results to differ
materially from those expressed in any forward-looking statements made by M & F Worldwide:
(a) economic, climatic or political conditions in countries in which Mafco Worldwide sources
licorice root; (b) 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; (c) 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; (d) the maturity of the principal industry in which Clarke American
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 and other factors; (e)
consolidation among financial institutions and other adverse changes among the large clients on
which Clarke American depends, resulting in decreased revenues; (f) lower than expected cash
flow from operations; (g) significant increases in interest rates; (h) unfavorable foreign currency
fluctuations; and (i) the Company’s substantial indebtedness. M & F Worldwide assumes no
responsibility to update the forward-looking statements contained in this release.
