M&F Worldwide Corp. (NYSE: MFW), today reported results for the first quarter ended April 1, 2001.
Sales for the first quarter were $25.0 million as compared to $22.7 million in the prior year quarter. Net income available to common stockholders for the first quarter amounted to $9.0 million or $0.47 per share as compared to $4.4 million or $0.21 per share for the prior year quarter. In February the Company completed a reversion of its salaried pension plan and realized $33.8 million in cash after paying an excise tax of $8.5 million. A net after excise tax gain of $11.0 million was recognized in the quarter and $7.6 million was recorded in the tax provision relating to this gain. The Company’s net income available to stockholders excluding the impact of the pension reversion would have been $5.6 million or $0.29 per share as compared to $4.4 million or $0.21 per share for the prior year quarter.
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First quarter sales were higher than the prior year quarter due to higher licorice shipments primarily to the Company’s domestic and foreign tobacco customers. The higher income from the increase in sales combined with the lower salary costs resulted in an operating margin increase to 38.4% from 36.3% in the prior year quarter.
Even though the Company has reported its results on a fully taxed basis, it still has approximately $62 million of tax loss carryforwards available which will be utilized to offset federal income taxes payments.
Outstanding debt declined from $29.4 million at December 31, 2000 to $24.6 million at April 1, 2001. On April 19 the Company entered into an Amended & Restated Credit Agreement pursuant to which the Company borrowed $95.0 million and together with a portion of the funds from the pension reversion, refinanced its existing debt and purchased 7,320,225 shares of Panavision Inc. (see the Company’s news release of April 19, 2001).
M&F Worldwide is a holding company that, through its wholly-owned subsidiary Mafco Worldwide Corporation, produces licorice extracts and a variety of natural botanical products.
M & F WORLDWIDE CORP. AND SUBSIDIARIES
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By GlobalData CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share data)
(Unaudited)
Three Month Periods Ended
April 1, April 2,
2001 2000
Net sales $25.0 $22.7
Cost of sales (13.0) (11.9)
Gross profit 12.0 10.8
Selling, general and administrative
expenses (1.3) (1.4)
Gain on pension reversion, net of
excise tax of $8.5 11.0 —
Amortization of intangibles (1.1) (1.1)
Operating income 20.6 8.3
Interest expense, net (0.2) (0.8)
Income before income taxes 20.4 7.5
Provision for income taxes (11.4) (3.1)
Net income available to common
stockholders $9.0 $4.4
Income per common share:
Basic $0.47 $0.21
Diluted $0.47 $0.21
Weighted average shares outstanding:
Basic 19.1 20.7
Diluted 19.1 20.7
M & F WORLDWIDE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions, except per share data)
(Unaudited)
April 1, December 31,
2001 2000
ASSETS
Current Assets
Cash and cash equivalents $35.1 $2.6
Trade accounts receivable, net 13.1 9.6
Inventories 47.8 48.5
Prepaid expenses and other 2.8 2.4
Total current assets 98.8 63.1
Property, plant and equipment, net 21.7 22.5
Deferred tax asset, net 17.3 26.8
Intangible assets related to business
acquired, net 148.7 150.5
Pension asset 12.3 33.9
Other assets 2.0 2.0
Total Assets $300.8 $298.8
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Short term borrowings $0.1 $0.4
Trade accounts payable 3.2 4.1
Accrued compensation and
benefits 2.1 3.7
Taxes payable 8.1 6.5
Other accrued expenses 4.6 4.4
Total current liabilities 18.1 19.1
Long-term debt 24.5 29.0
Other liabilities 5.0 5.0
Commitments and contingencies — —
Stockholders’ equity:
Common stock, par value $.01;
250,000,0000 shares authorized;
20,663,171 shares issued
and outstanding 0.2 0.2
Additional paid-in-capital 27.0 27.0
Treasury stock at cost
1,541,900 shares (8.7) (8.7)
Retained earnings 244.4 235.4
Accumulated other comprehensive
loss (9.7) (8.2)
Total stockholders’ equity 253.2 245.7
Total liabilities and stockholders’
equity $300.8 $298.8
M & F WORLDWIDE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
(Unaudited)
Three Month Periods Ended
April 1, April 2,
2001 2000
Cash flows from operating activities:
Net income $9.0 $4.4
Adjustments to reconcile net income
to net cash flows provided by
operating activities:
Depreciation 0.7 0.7
Amortization 1.1 1.1
Deferred income taxes 9.6 2.3
Compensation expense (1.7) (1.0)
Changes in assets and liabilities:
Increase in trade accounts
receivable (3.7) (1.2)
Decrease (increase) in
inventories 0.2 (0.5)
Decrease in accounts payable and
accrued expenses (0.8) (1.0)
Decrease (increase) in pension
asset 21.6 (1.7)
Other, net 1.6 1.1
Cash provided by operating
activities 37.6 4.2
Cash flows used in investing
activities:
Capital expenditures (0.2) (0.3)
Cash used in investing
activities (0.2) (0.3)
Cash flows used in financing
activities:
Repayment of borrowings (5.5) (6.0)
Repayment of short term borrowings (0.3) —
Proceeds from revolving credit
facility 1.0 3.0
Debt issuance costs (0.1) —
Cash used in financing
activities (4.9) (3.0)
Effect of exchange rates on cash — (0.1)
Net increase in cash and cash
equivalents 32.5 0.8
Cash and cash equivalents at
beginning of period 2.6 1.8
Cash and cash equivalents at end of
period $35.1 $2.6
Contact: John Burke of M&F Worldwide Corporation, 212-484-7541
