Harland Clarke, the world's biggest check printer, reported that second-quarter losses increased to $22.8 million amid costs related to the billionaire Ronald Perelman taking the company private a year ago.
The company, which recently agreed to sell its Harland Financial Solutions for $1.2 billion, attributed the widening losses, compared with a $7.7 million loss for last year's second quarter, to a $61 million charge for the early retirement of debt and accounting related to the going-private deal by MacAndrews & Forbes, the holding company owned by Perelman.
As a result of the MacAndrews acquisition, Harland Clarke was required to use the acquisition method of accounting to revalue its assets and liabilities, resulting in a number of noncash adjustments including decreased revenues as a result of fair-value adjustments to deferred revenues, increased depreciation and amortization as a result of the revaluation of assets and increased noncash interest expense that results from adjusting the company's long-term debt to fair value as of the date of the MacAndrews acquisition.
Harland Clarke, the combination of the check printers John H. Harland Co. and Clarke American, reported an 8% rise in second-quarter revenue to $437.3 million, primarily due to an increase in license fee revenues at Harland Financial, new business contracts at the Faneuil segment, and revenue from the May acquisition of NCP Solutions, a provider of bank statements.
For the first six months of the year Harland Clarke reported a 6% increase in revenue to $866.8 million, and a decline in losses to $8.8 million, from $30.6 million.
Last month Harland Clarke announced a deal to sell Harland Financial for $1.2 billion in cash to Davis + Henderson, a Toronto-based provider of services to credit unions and banks.