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Harland: Software Offsets Check Sales
Declining consumer check use drove down second-quarter earnings at John H. Harland Co. but was offset by growth in the Atlanta company's software division.
Harland, the No. 2 check printer after Deluxe Corp. of Shoreview, Minn., reported Friday that its net income fell 12.1% from the same period last year, to $16.5 million.
Earnings per diluted share fell 9%, to 61 cents, and consolidated sales rose 8.4%, to $259.4 million.
Timothy C. Tuff, Harland's chairman and chief executive, said in a press release that the second-quarter results were solid "but came in at the low end of our guidance due to lower volumes in checks and our traditional forms business."
Harland said sales by its printed products division rose 5.9%, to $159 million, but net income fell 2.2%, to $26.5 million, because of the loss of a large customer (which the vendor did not name) and slower orders from several others.
In recent years many consumers have decreased their use of checks and increased their use of payment cards and online bill payment services.
Sales by the software and services division climbed 18.8% to 73.6 million, and net income grew 13.3%, to $7.6 million.
Harland has made efforts to expand its technology business to offset the decline in demand for checks. For example, it acquired the core processing outsourcer Intrieve Inc. last year.
Sales by Harland's third division, the educational testing equipment company Scantron, fell 0.7%, to $27.1 million, though its net income rose 18.2%, to $6.3 million, because of improvements in its cost structure.
Harland expects to earn 57 to 62 cents a share this quarter and $2.83 to $2.88 this year.
The vendor said it bought back 717,400 of its shares in the second quarter at an average price of $42.43 each. It is authorized to buy back nearly 1.8 million more.
Harland's stock price fell 12.8% Friday to $39.50, and slipped again on Monday. At midday it was trading at $34.03, down 1.19%.
Deere & Co. to Use Fidelity National Tool
The agricultural and commercial equipment maker Deere & Co. has licensed the Profile core banking system from Fidelity National Information Services Inc. to process its U.S. installment loan portfolio.
Art Woodcock, the vice president of retail lending at the Moline, Ill., manufacturer's John Deere Credit, said last week in a Fidelity National press release that his company is converting from a mainframe system to Fidelity's core processing system to support its "future growth and continued focus on customer service."
John Deere Credit has $13.1 billion of financing receivables. James Meenagh, a spokesman for the unit, said the company plans a phased rollout of the Profile system over the next 18 to 24 months.
Fidelity National, which is majority owned by Fidelity National Financial Inc. of Jacksonville, Fla., said the licensing deal illustrates the value that nonbank lenders find in its core system offerings.
(Fidelity National plans to spin off its technology unit next quarter.)
Hundreds of institutions in 16 countries use the Profile system for real-time processing of accounts, Fidelity National Information said.
Fidelity's Profile software uses a single database of customer accounts and company products, and keeps track of deposit and loan transactions, in multiple currencies.
Frank Sanchez, the president of Fidelity National Information, said in the release that, "we look forward to working with John Deere Credit to ensure that it realizes the most value from our solutions."
