DECATUR, Ga. – Harland Clarke Holdings said Friday that lower debt service charges helped produce a doubling in net income for its second quarter, even as revenues from its core check printing business continued to slide.
Revenues at the company, formed by the combination of Clarke American and John H. Harland Co., declined 7% in the second quarter to $426.4 million, with revenues for the check printing operations falling by $22.7 million, to $329 million, compared to the same period last year. The decrease in revenues was primarily due to volume declines from check and related products, which the company said it believes was partially affected by the economic downturn.
But refinancing related to the separate deals that formed the nation’s largest check printer helped push net income higher. Second quarter results include an $8.9 million gain on the early extinguishment of debt, and reduced interest expense of $8.7 million due to lower rates on variable-rate debt.
The two check printers were acquired by one-time corporate raider Ronald O. Perelman and his holding company, known as M&F Worldwide. The operations also include the Harland Financial Solutions and Scantron units of John H. Harland Co.
For the first six months of the year, Harland Clarke reported a 4.1% decline in revenues, but a tripling in net income to $74.9 million, created entirely by a $20.8 million, or 22% decline in interest expense, and a $61.5 million gain on the early extinguishment of debt.
