NEW YORK – M&F Worldwide Corp., the holding company controlled by financier Ronald O. Perelman that combined check printers Clarke American and John H. Harland Co., reported a healthy net income of $51.3 million based on the buyback of debt it accrued in the two takeovers at a steep discount.
The surge in net income, from just $12.5 million for the first quarter last year, was created by a $52.6 million gain on the early extinguishment of debt and a $12.9 million decline in interest expense for the first quarter, even as M&W’s revenues were continuing to decline by almost $8 million for the period.
The early extinguishment of debt reflects the gain from the purchase of Harland Clarke Holdings Corp. bonds at less than their principal amount.
Revenues for the Harland Clarke, the vehicle M&F created to operate the check printing operations assets of Clarke American and Harland, decreased by $17 million, or 5.1%, to $315.1 million for the first quarter of 2009, primarily as a result of volume declines from check and related products.
Revenues for the Harland Financial Solutions segment decreased by $2 million, or 2.8%, to $69.2 million for the first quarter of 2009, as a result of decreases from both the risk management and enterprise solutions product lines.
