SAN ANTONIO – Harland Clarke Holdings, the nation’s biggest check printers, reported a third losses of $19 million, compared to a profit of $46.6 million for the third quarter last year, because of costs associated with the this year’s going-private merger.
As a result of the deal, the company was required to use the acquisition method of accounting to revalue its assets and liabilities as of the date of the MacAndrews acquisition. Such accounting results in a number of non-cash adjustments including, but not limited to, decreased revenues as a result of fair value adjustments to deferred revenues, increased depreciation and amortization and increased non-cash interest expense that results from adjusting the company's long-term debt to fair value as of the date of the MacAndrews acquisition.
MacAndrews is the privately owned holding company of corporate financier Ronald Perelman.
For the third quarter, operating income for the company’s core check printing operations segment decreased by $9.2 million, or 14%, to $56.6 million, from $65.8 million for the third quarter of 2011. The decrease in operating income was primarily due to volume declines, net charges for non-cash fair value adjustments related to the MacAndrews acquisition that reduced operating income by $6.3 million, and an increase in restructuring charges of $6 million.
Harland Clark Holdings has four business segments: Harland Clarke, Harland Financial Solutions, Scantron and Faneuil.
