M & F Worldwide Corporation Reports Income for
2006 Second Quarter and Six Months
New York, NY – August 4, 2006 – M & F Worldwide Corp. (NYSE: MFW - News),
today reported results for the second quarter and six months ended June 30, 2006.
Net revenues for the second quarter of 2006 were $182.2 million as compared to
$25.3 million in the second quarter of 2005. The Company’s revenues increased by
$156.9 million in the 2006 quarter primarily as a result of the Clarke American
acquisition which occurred in December 2005 and accounted for $156.2 million of the
increase. Net income was $8.0 million for the second quarter of 2006 as compared to $6.0
million for the second quarter of 2005. The increase of $2.0 million is primarily due to
the acquisition of Clarke American, which accounted for $3.9 million of the increase,
partially offset by interest expense on Mafco Worldwide’s long-term debt incurred in
connection with the acquisition of Clarke American. Basic earnings per common share
were $0.41 in the second quarter of 2006 and $0.31 in the second quarter of 2005.
Diluted earnings per common share were $0.40 in the second quarter of 2006 and $0.30
in the second quarter of 2005.
Net revenues for the six months ended June 30, 2006 were $369.4 million as
compared to $49.4 million in the 2005 six month period. The Company’s revenues
increased by $320.0 million in the 2006 period as a result of the Clarke American
acquisition which accounted for $319.1 million of the increase. Net income was $18.4
million for the six months ended June 30, 2006 as compared to $12.3 million for the 2005
period. The increase of $6.1 million is primarily due to the acquisition of Clarke
American, which accounted for $10.3 million of the increase, partially offset by interest
expense on Mafco Worldwide’s long-term debt incurred in connection with the
acquisition of Clarke American. Basic earnings per common share were $0.94 in the six
months ended June 30, 2006 and $0.64 in the 2005 period. Diluted earnings per common
share were $0.91 in the six months ended June 30, 2006 and $0.62 in the 2005 period.
Licorice Products Segment
Net revenues from the Licorice Products segment, operated by Mafco Worldwide,
increased by $0.7 million, or 2.8% to $26.0 million in the second quarter of 2006 from
$25.3 million in the second quarter of 2005. This increase was due to an increase in
revenues from the worldwide tobacco industry of $0.5 million, increased revenues from
Magnasweet and licorice derivatives of $0.1 million and increased revenues from the
worldwide confectionary industry of $0.1 million. Revenues from tobacco and
confectionary customers increased primarily due to the purchases of premium value
products. Magnasweet sales increased primarily due to higher shipment volumes.
Operating income was $10.2 million in the second quarter of 2006 versus $9.9 million in
the second quarter of 2005. The increase in operating income of $0.3 million was due to
an increase in revenues, partially offset by increased manufacturing costs primarily due to
substantially higher energy costs and increased other manufacturing costs, especially raw
materials, in the second quarter of 2006.
Net revenues from the Licorice Products segment increased by $0.9 million, or 1.8%
to $50.3 million in the six months ended June 30, 2006 from $49.4 million in the 2005
period. This increase was due to an increase in revenues from the worldwide tobacco
industry of $0.7 million and increased revenues from Magnasweet and licorice
derivatives of $0.5 million, partially offset by a decline in revenues from the worldwide
confectionary industry of $0.3 million. Net revenues from tobacco customers increased
primarily due to the purchases of premium value products. Magnasweet sales increased
primarily due to higher shipment volumes. Revenues from confectionary customers
declined primarily due to lower shipment volumes in the six months ended June 30, 2006
versus the 2005 period. Operating income was $19.4 million in both the 2006 and 2005
six month periods as revenue increases were completely offset by a net increase
manufacturing and other operating costs.
Financial Institution and Direct to Consumer Segments
Revenues and operating income for the Financial Institution segment, operated by
Clarke American, in the second quarter of 2006 were $131.9 million and $18.9 million,
respectively. Revenues and operating income for the Direct to Consumer segment, also
operated by Clarke American, in the second quarter of 2006 were $24.3 million and $2.1
million, respectively.
Revenues and operating income for the Financial Institution segment for the six
months ended June 30, 2006 were $268.5 million and $41.0 million, respectively.
Revenues and operating income for the Direct to Consumer segment for the six months
ended June 30, 2006 were $50.6 million and $5.1 million, respectively.
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.
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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 forwardlooking
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 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.
