Decline In Checks Weighs Down Check Printing Giant Harland Clarke
SAN ANTONIO – Harland Clarke Holdings, the nation’s biggest printer of checks, on Thursday said declines in its core checks business, combined with interest costs related to the takeovers of the John H. Harland and Clarke American checks business forming the conglomerate, to push down earnings for its third quarter.
The erosion of the company’s checks business is similar to what is occurring at Deluxe Corp., which also is being hurt by the continuing migration of consumers to electronic transactions.
Harland Clarke reported its revenues declined another 3% in the third quarter, to $411.5 million, pushing down earnings by 18%, to $27.6 million for the period. The decline in revenues was caused mainly by a 5%, or $15.1 million fall-off in sales for the company’s core check printing business for the third quarter. The decrease was primarily due to volume declines in check and related products and the loss of a client.
For the first three quarters of the year Harland Clarke reported a 2% decline in revenues to $1.26 billion. The company’s core checks business reported a 2% decline in sales, or $19.1 million, for the first nine months.
Net income for the first three quarters declined by 19%, to $87.8 million.
Declines in revenues were exacerbated by $27.7 million of interest on debt in the third quarter and $87.9 million for the first three quarters, even as Harland Clarke has carefully trimmed its debt service by buying back its own debt at a discount and refinancing bonds related to the Harland and Clarke American deals.
Harland Clarke, a subsidiary of financier Ronald Perelman’s M&F Worldwide Corp., was formed by M&F’s 2005 takeover of Clarke American and 2007 takeover of John H. Harland Co., and the combination of the two check printing operations. Perelman, who controls M&F through his privately owned holding company MacAndrews & Forbes, made his name on Wall Street during takeover battles for Revlon Inc., Marvel comics and Colmena sporting goods.