Harland Reports First Quarter Results; Earnings Exceed Expectations Revenue up 8% for the Quarter

Apr 26, 2001, 01:00 ET from John H. Harland Company

    ATLANTA, April 26 /PRNewswire/ -- John H. Harland Company (NYSE:   JH) today
 reported first quarter results and reiterated earnings expectations for the
 year.
     Consolidated net income for the quarter was $10.3 million, or $0.35 per
 share on a diluted basis, compared to $11.5 million, or $0.40 per share on a
 diluted basis for the same period a year earlier.  Earnings for the first
 quarter exceeded analyst expectations.  Consolidated revenues for the quarter
 were $191.3 million, an 8.3% increase from the $176.7 million reported in
 2000.  EBITDA for the quarter was $36.1 million, a 20% increase from $30.1
 million for the first quarter of 2000.  The company also reduced its long-term
 debt during the quarter by $30 million.
     "Earnings for the first quarter exceeded original expectations despite
 lower revenue than planned in our printed products and software and services
 businesses," said Timothy C. Tuff, chairman and chief executive officer of
 Harland.  "Each of our businesses is now positioned to pursue growth
 opportunities."
 
     Segment Reporting
     Harland reports results for three business segments: Printed Products,
 Software and Services and Scantron.
     Revenue for the quarter from the company's Printed Products segment, which
 includes checks, direct marketing and business solutions, was $138.8 million,
 compared to $147.6 million in 2000.  Contribution from Printed Products
 declined 1.9% year-over-year to $24.8 million.
     "We have improved the way we produce and deliver check orders for our
 financial institution customers and continue to develop ways to improve the
 efficiencies of our customers' checking programs," said Tuff.  "Contribution
 from this segment was down during the quarter due to a decline in direct
 marketing sales."
     Software and Services reported revenues of $29.9 million for the quarter,
 compared to $6.7 million a year earlier.  Software and Services accounted for
 15.6% of the company's total revenue for the quarter, compared to 3.8% of the
 total revenue for the first quarter of 2000.  Software and Services reported a
 pre-tax loss of $1.9 million, compared to a pre-tax loss of $925,000 in 2000.
 Results reported last year did not include the impact of the acquisition of
 Concentrex in August of 2000.
     "We've made good progress in improving the performance of our software
 business, and we're now one of the leading providers of software to financial
 institutions," said Tuff.  "Moving forward, you will see us improving the
 business further and introducing products and services that integrate business
 intelligence with transaction processing."
     Harland's Scantron subsidiary reported revenues of $22.9 million for the
 quarter, up almost 2% from a year earlier.  Scantron also reported strong
 contribution of $5.3 million for the quarter, up 57.3% from the first quarter
 in 2000.
     "Scantron has always been a strong financial contributor," said Tuff.  "We
 believe that with the increased attention being paid to education on national
 and state levels, there are now real opportunities for Scantron to build on
 its strong market position."  Scantron is one of the leading brands in
 education, with a presence in 96% of school districts with more than 10,000
 students and 80% of colleges and universities.
     The company reiterated its earnings forecast for the year of $1.65-$1.70
 per share, with earnings for the second quarter to be in the range of
 $0.35-$0.37 per share.
     Harland will hold a conference call today at 10:00 a.m. EDT to discuss the
 results of the quarter and future outlook.  Interested parties may listen in
 by accessing a live Web cast on Harland's Web site at www.harland.net .  A
 replay will also be available on Harland's Web site after the call.
     Harland's annual meeting of shareholders will be held tomorrow, April 27,
 at 10:00 a.m. at The Georgian Terrace Hotel, 659 Peachtree Street, Atlanta,
 Georgia.  The meeting will be broadcast via the company's Web site at
 www.harland.net .
     The company has posted quarterly segment information dating back to 1999.
 The segment information can be found in the investor relations section of the
 company's Web site at www.harland.net .
 
     About Harland
     Atlanta-based John H. Harland Company (www.harland.net ) is listed on the
 New York Stock Exchange under the symbol "JH."  Harland is a leading provider
 of software and printed products to the financial institution market.
 Harland's software solutions include, loan origination software, database
 marketing, host processing and mortgage services.  Harland's printed products
 offerings include checks, direct marketing and financial forms.  Scantron
 Corporation (www.scantron.com ), a wholly owned subsidiary, is a leading
 provider of software services and systems for the collection, management and
 interpretation of data to the financial, commercial and educational markets.
 
     RISK FACTORS AND CAUTIONARY STATEMENTS
     This press release contains statements which may constitute "forward-
 looking statements" within the meaning of the Private Securities Litigation
 Reform Act of 1995.  Those statements include statements regarding the intent,
 belief or current expectations of John H. Harland Company and members of its
 management, as well as the assumptions on which such statements are based.
 Prospective investors are cautioned that any such forward-looking statements
 are not guarantees of future performance and involve risks and uncertainties
 and that the actual results may differ materially from those contemplated by
 such forward-looking statements.  Such differences could be material and
 adverse.
     Many variables will impact the ability to improve service quality, achieve
 production efficiencies and reduce expenses in Printed Products.  These
 include, but are not limited to, the implementation of new digital technology
 and automated ordering systems used in the Company's manufacturing operations.
     Several factors outside the Company's control could negatively impact
 check revenue.  These include the continuing expansion of alternative payment
 systems such as credit cards, debit cards and other forms of electronic
 commerce or on-line payment systems.  Check revenues could also be adversely
 affected by continued consolidation of financial institutions and competitive
 check pricing.  There can be no assurances that the Company will not lose
 significant customers or that any such loss could be offset by the addition of
 new customers.
     While the Company believes substantial growth opportunities exist in the
 Software and Services segment, there can be no assurances that the Company
 will achieve its revenue or earnings growth targets.  The Company believes the
 software business does represent a turnaround and therefore has many inherent
 risk factors, including but not limited to the retention of employee talent
 and the retention of customers.  In addition there are many variables and
 risks associated with the integration and rationalization of the Concentrex
 acquisition with Harland's existing software business.  Also, variables exist
 in the development of new software products, including the timing and costs of
 the development effort, product performance, functionality, product acceptance
 and competition.
     Reference should be made to the Risk Factors and Cautionary Statements
 section of Harland's Form 10-K and Form 10-Q for additional information.
 Harland undertakes no obligation to update or revise forward-looking
 statements to reflect changed assumptions, the occurrence of unanticipated
 events or changes to future operating results.
 
     John H. Harland Company
     Financial Highlights
     1st Quarter 2001
 
     Condensed Balance Sheets (Unaudited)
     (in 000s)
                                            March 30, 2001  December 31, 2000
 
     Cash & Investments                             $17,962           $18,480
     Accounts Receivable                             63,662            86,767
     Inventory                                       19,695            20,603
     Deferred Income Taxes                           17,552            19,217
     Prepaid Income Taxes                             2,442            15,738
     Prepaid & Other                                  7,275             7,211
     Total Current Assets                           128,588           168,016
 
     Investments                                      8,301            16,740
     Goodwill and Intangibles                       139,496           142,960
     Deferred Income Taxes                            4,308             6,614
     Refundable Contract Payments                    25,801            25,705
     Other                                           28,798            33,301
     Property, Plant and Equipment - Net            134,323           129,590
     Total Assets                                  $469,615          $522,926
 
     Current Liabilities                           $115,124          $140,447
     Long-Term Debt                                 161,610           191,617
     Other Liabilities                               20,262            19,497
     Shareholders' Equity                           172,619           171,365
     Total Liabilities and Equity                  $469,615          $522,926
 
 
     John H. Harland Company
     Financial Highlights  (Unaudited)
     1st Quarter 2001
     (in 000s)
                                               3 Months ended
                                             March 30,   March 31,
                                               2001        2000         %
     Sales                                   $191,291    $176,702       8.3%
     Cost of sales                            106,662     108,995      -2.1%
     Pct of Sales                               55.8%       61.7%
     Gross profit                              84,629      67,707      25.0%
     Pct of Sales                               44.2%       38.3%
     Selling, general and administrative
      expenses                                 59,905      46,420      29.0%
     Pct of Sales                               31.3%       26.3%
     Amortization of intangibles                3,563       1,499     137.7%
     Pct of Sales                                1.9%        0.8%
     Operating Income                          21,161      19,788       6.9%
     Pct of Sales                               11.1%       11.2%
 
     Other Income (Expense):
       Interest expense                        (3,439)     (1,708)    101.3%
         Pct of Sales                           -1.8%       -1.0%
       Other - net                                144         808     -82.2%
         Pct of Sales                            0.1%        0.5%
     Income before Income Taxes                17,866      18,888      -5.4%
     Pct of Sales                                9.3%       10.7%
     Income taxes                               7,593       7,366       3.1%
     Pct of Sales                                4.0%        4.2%
     Net Income                               $10,273     $11,522     -10.8%
     Pct of Sales                                5.4%        6.5%
 
     Earnings per Share
        Basic                                   $0.36       $0.41     -12.2%
        Diluted                                  0.35       $0.40     -12.5%
     Weighted Average Shares (000)
        Basic                                  28,837      28,411       1.5%
        Diluted                                29,424      28,901       1.8%
     Shares O/S at end of period (000)         29,023      28,357       2.3%
     Return on Equity                           23.9%       27.0%    -3.1 pts
     EBITDA                                   $36,140     $30,097      20.1%
     Depreciation and Amortization (000)      $14,835      $9,501      56.1%
     Capital Expenditures (Millions of $)       $12.4        $8.3      49.4%
     Number of Employees
      (includes temporary employees)            5,171       5,252      -1.5%
 
 
 
     Segment Information (1)
 
     Printed Products
       Sales                                 $138,801    $147,647      -6.0%
       Depreciation & Amortization              8,380       6,941      20.7%
        Segment Income(2)                     $24,813     $25,292      -1.9%
 
     Software and Services
       Sales                                  $29,891      $6,712     345.3%
       Depreciation & Amortization              4,719         836     464.5%
        Segment Loss(2)                       $(1,931)      $(925)   -108.8%
 
     Scantron
       Sales                                  $22,908     $22,493       1.8%
       Depreciation & Amortization              1,090       1,185      -8.0%
        Segment Income(2)                      $5,345      $3,398      57.3%
 
     (1) Segment information does not include eliminations related to
     intercompany activity and does not include corporate expenses.
     (2) Segment income (loss) is defined as income before income taxes.
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X62487985
 
 

SOURCE John H. Harland Company
    ATLANTA, April 26 /PRNewswire/ -- John H. Harland Company (NYSE:   JH) today
 reported first quarter results and reiterated earnings expectations for the
 year.
     Consolidated net income for the quarter was $10.3 million, or $0.35 per
 share on a diluted basis, compared to $11.5 million, or $0.40 per share on a
 diluted basis for the same period a year earlier.  Earnings for the first
 quarter exceeded analyst expectations.  Consolidated revenues for the quarter
 were $191.3 million, an 8.3% increase from the $176.7 million reported in
 2000.  EBITDA for the quarter was $36.1 million, a 20% increase from $30.1
 million for the first quarter of 2000.  The company also reduced its long-term
 debt during the quarter by $30 million.
     "Earnings for the first quarter exceeded original expectations despite
 lower revenue than planned in our printed products and software and services
 businesses," said Timothy C. Tuff, chairman and chief executive officer of
 Harland.  "Each of our businesses is now positioned to pursue growth
 opportunities."
 
     Segment Reporting
     Harland reports results for three business segments: Printed Products,
 Software and Services and Scantron.
     Revenue for the quarter from the company's Printed Products segment, which
 includes checks, direct marketing and business solutions, was $138.8 million,
 compared to $147.6 million in 2000.  Contribution from Printed Products
 declined 1.9% year-over-year to $24.8 million.
     "We have improved the way we produce and deliver check orders for our
 financial institution customers and continue to develop ways to improve the
 efficiencies of our customers' checking programs," said Tuff.  "Contribution
 from this segment was down during the quarter due to a decline in direct
 marketing sales."
     Software and Services reported revenues of $29.9 million for the quarter,
 compared to $6.7 million a year earlier.  Software and Services accounted for
 15.6% of the company's total revenue for the quarter, compared to 3.8% of the
 total revenue for the first quarter of 2000.  Software and Services reported a
 pre-tax loss of $1.9 million, compared to a pre-tax loss of $925,000 in 2000.
 Results reported last year did not include the impact of the acquisition of
 Concentrex in August of 2000.
     "We've made good progress in improving the performance of our software
 business, and we're now one of the leading providers of software to financial
 institutions," said Tuff.  "Moving forward, you will see us improving the
 business further and introducing products and services that integrate business
 intelligence with transaction processing."
     Harland's Scantron subsidiary reported revenues of $22.9 million for the
 quarter, up almost 2% from a year earlier.  Scantron also reported strong
 contribution of $5.3 million for the quarter, up 57.3% from the first quarter
 in 2000.
     "Scantron has always been a strong financial contributor," said Tuff.  "We
 believe that with the increased attention being paid to education on national
 and state levels, there are now real opportunities for Scantron to build on
 its strong market position."  Scantron is one of the leading brands in
 education, with a presence in 96% of school districts with more than 10,000
 students and 80% of colleges and universities.
     The company reiterated its earnings forecast for the year of $1.65-$1.70
 per share, with earnings for the second quarter to be in the range of
 $0.35-$0.37 per share.
     Harland will hold a conference call today at 10:00 a.m. EDT to discuss the
 results of the quarter and future outlook.  Interested parties may listen in
 by accessing a live Web cast on Harland's Web site at www.harland.net .  A
 replay will also be available on Harland's Web site after the call.
     Harland's annual meeting of shareholders will be held tomorrow, April 27,
 at 10:00 a.m. at The Georgian Terrace Hotel, 659 Peachtree Street, Atlanta,
 Georgia.  The meeting will be broadcast via the company's Web site at
 www.harland.net .
     The company has posted quarterly segment information dating back to 1999.
 The segment information can be found in the investor relations section of the
 company's Web site at www.harland.net .
 
     About Harland
     Atlanta-based John H. Harland Company (www.harland.net ) is listed on the
 New York Stock Exchange under the symbol "JH."  Harland is a leading provider
 of software and printed products to the financial institution market.
 Harland's software solutions include, loan origination software, database
 marketing, host processing and mortgage services.  Harland's printed products
 offerings include checks, direct marketing and financial forms.  Scantron
 Corporation (www.scantron.com ), a wholly owned subsidiary, is a leading
 provider of software services and systems for the collection, management and
 interpretation of data to the financial, commercial and educational markets.
 
     RISK FACTORS AND CAUTIONARY STATEMENTS
     This press release contains statements which may constitute "forward-
 looking statements" within the meaning of the Private Securities Litigation
 Reform Act of 1995.  Those statements include statements regarding the intent,
 belief or current expectations of John H. Harland Company and members of its
 management, as well as the assumptions on which such statements are based.
 Prospective investors are cautioned that any such forward-looking statements
 are not guarantees of future performance and involve risks and uncertainties
 and that the actual results may differ materially from those contemplated by
 such forward-looking statements.  Such differences could be material and
 adverse.
     Many variables will impact the ability to improve service quality, achieve
 production efficiencies and reduce expenses in Printed Products.  These
 include, but are not limited to, the implementation of new digital technology
 and automated ordering systems used in the Company's manufacturing operations.
     Several factors outside the Company's control could negatively impact
 check revenue.  These include the continuing expansion of alternative payment
 systems such as credit cards, debit cards and other forms of electronic
 commerce or on-line payment systems.  Check revenues could also be adversely
 affected by continued consolidation of financial institutions and competitive
 check pricing.  There can be no assurances that the Company will not lose
 significant customers or that any such loss could be offset by the addition of
 new customers.
     While the Company believes substantial growth opportunities exist in the
 Software and Services segment, there can be no assurances that the Company
 will achieve its revenue or earnings growth targets.  The Company believes the
 software business does represent a turnaround and therefore has many inherent
 risk factors, including but not limited to the retention of employee talent
 and the retention of customers.  In addition there are many variables and
 risks associated with the integration and rationalization of the Concentrex
 acquisition with Harland's existing software business.  Also, variables exist
 in the development of new software products, including the timing and costs of
 the development effort, product performance, functionality, product acceptance
 and competition.
     Reference should be made to the Risk Factors and Cautionary Statements
 section of Harland's Form 10-K and Form 10-Q for additional information.
 Harland undertakes no obligation to update or revise forward-looking
 statements to reflect changed assumptions, the occurrence of unanticipated
 events or changes to future operating results.
 
     John H. Harland Company
     Financial Highlights
     1st Quarter 2001
 
     Condensed Balance Sheets (Unaudited)
     (in 000s)
                                            March 30, 2001  December 31, 2000
 
     Cash & Investments                             $17,962           $18,480
     Accounts Receivable                             63,662            86,767
     Inventory                                       19,695            20,603
     Deferred Income Taxes                           17,552            19,217
     Prepaid Income Taxes                             2,442            15,738
     Prepaid & Other                                  7,275             7,211
     Total Current Assets                           128,588           168,016
 
     Investments                                      8,301            16,740
     Goodwill and Intangibles                       139,496           142,960
     Deferred Income Taxes                            4,308             6,614
     Refundable Contract Payments                    25,801            25,705
     Other                                           28,798            33,301
     Property, Plant and Equipment - Net            134,323           129,590
     Total Assets                                  $469,615          $522,926
 
     Current Liabilities                           $115,124          $140,447
     Long-Term Debt                                 161,610           191,617
     Other Liabilities                               20,262            19,497
     Shareholders' Equity                           172,619           171,365
     Total Liabilities and Equity                  $469,615          $522,926
 
 
     John H. Harland Company
     Financial Highlights  (Unaudited)
     1st Quarter 2001
     (in 000s)
                                               3 Months ended
                                             March 30,   March 31,
                                               2001        2000         %
     Sales                                   $191,291    $176,702       8.3%
     Cost of sales                            106,662     108,995      -2.1%
     Pct of Sales                               55.8%       61.7%
     Gross profit                              84,629      67,707      25.0%
     Pct of Sales                               44.2%       38.3%
     Selling, general and administrative
      expenses                                 59,905      46,420      29.0%
     Pct of Sales                               31.3%       26.3%
     Amortization of intangibles                3,563       1,499     137.7%
     Pct of Sales                                1.9%        0.8%
     Operating Income                          21,161      19,788       6.9%
     Pct of Sales                               11.1%       11.2%
 
     Other Income (Expense):
       Interest expense                        (3,439)     (1,708)    101.3%
         Pct of Sales                           -1.8%       -1.0%
       Other - net                                144         808     -82.2%
         Pct of Sales                            0.1%        0.5%
     Income before Income Taxes                17,866      18,888      -5.4%
     Pct of Sales                                9.3%       10.7%
     Income taxes                               7,593       7,366       3.1%
     Pct of Sales                                4.0%        4.2%
     Net Income                               $10,273     $11,522     -10.8%
     Pct of Sales                                5.4%        6.5%
 
     Earnings per Share
        Basic                                   $0.36       $0.41     -12.2%
        Diluted                                  0.35       $0.40     -12.5%
     Weighted Average Shares (000)
        Basic                                  28,837      28,411       1.5%
        Diluted                                29,424      28,901       1.8%
     Shares O/S at end of period (000)         29,023      28,357       2.3%
     Return on Equity                           23.9%       27.0%    -3.1 pts
     EBITDA                                   $36,140     $30,097      20.1%
     Depreciation and Amortization (000)      $14,835      $9,501      56.1%
     Capital Expenditures (Millions of $)       $12.4        $8.3      49.4%
     Number of Employees
      (includes temporary employees)            5,171       5,252      -1.5%
 
 
 
     Segment Information (1)
 
     Printed Products
       Sales                                 $138,801    $147,647      -6.0%
       Depreciation & Amortization              8,380       6,941      20.7%
        Segment Income(2)                     $24,813     $25,292      -1.9%
 
     Software and Services
       Sales                                  $29,891      $6,712     345.3%
       Depreciation & Amortization              4,719         836     464.5%
        Segment Loss(2)                       $(1,931)      $(925)   -108.8%
 
     Scantron
       Sales                                  $22,908     $22,493       1.8%
       Depreciation & Amortization              1,090       1,185      -8.0%
        Segment Income(2)                      $5,345      $3,398      57.3%
 
     (1) Segment information does not include eliminations related to
     intercompany activity and does not include corporate expenses.
     (2) Segment income (loss) is defined as income before income taxes.
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X62487985
 
 SOURCE  John H. Harland Company