By Ann Levine February 18, 2004 – Bowne & Co., Inc. (NYSE: BNE) today announced fourth quarter revenues of $251.4 million for 2003 or a 6% increase over the $232.2 million reported for the fourth quarter of 2002. The net loss for the quarter was reported at $3.3 million or a loss of $0.10 per share. Excluding one-time items, pro forma earnings per share were $0.07 in 2003 compared to a $0.19 loss per share for 2002. For the entire year, revenues were $1.065 billion, a 6% increase from $1.003 billion in 2002. The full year 2003 tallied a net loss of $9.1 million or a loss of $0.27 per share. Excluding special charges, Bowne’s pro forma earnings per share were $0.27 in 2003 and $0.11 in 2002. Topics of this summary: Overview of 2003 Performance by Segment Outlook Q & A Overview Bowne Chairman and CEO, Mr. Robert Johnson, began today’s earnings call with a recap of events impacting the company in 2003. Mr. Johnson reiterated comments of a year ago stating that 2003 results would be difficult to predict due to coming off of a difficult year for financial printing and a subsequent slow start to 2003, the war with Iraq, and the integration of Berlitz GlobalNet. Johnson went on to outline the company’s positive performance during the year. The Berlitz GlobalNet integration, though taking longer and having more expense that anticipated, has now been completed with revenues growth, and strong customer retention and satisfaction. Financial print was off to a slow start in the first part of 2003, but the company and has seen steady improvement in the second half of the year. Performance by Segment Financial Print – This segment ended the fourth quarter with a 5% increase in revenues at $6.4 million with an increase in profit of $9.9 million compared to same quarter last year. International Financial print revenues from Europe and Asia were down 21% for the entire year, but fourth quarter revenues were up 16%. There is an expectation for more M & A activity, up from the past two years. Last year Enterprise Solutions launched its client centric communication strategy model to assist firms in maximizing their investment in client communications by using a variety of strategies. Business Solutions – Revenues in this segment increase by $20.8 million or 8.9%. DecisionQuest alone accounted for revenues of $33.2 million. The integration of DecisionQuest allows the company to capitalize on the billion-dollar litigation market. Although Bowne reported increased revenues in this segment, the company also reported decreased volumes with investment banking and law firm clients. During the fourth quarter, several new outsourcing clients were added to the company’s roster which is expected to add $22 million in total new contract revenue. Additionally, new desktop publishing contracts with financial services clients are expected to add $33 million in revenue. Global Solutions – Global Solutions revenues increased $2.5 million of 5% during the fourth quarter with a profit increase of $3.9 million. Bowne plans to further diversify this segment and increase market share. New contract wins in Global Solutions were with the Department of Justice Interpretation Services which should provide $100 million in revenue, and a $4.5 million contract with a European auto manufacturer. Outlook Due to the volatility of the market, Bowne has declined to provide outlook on a quarterly basis and instead has provided guidance for the full-year 2004. Bowne expects total revenues in the range of $1.1 – $1.2 billion with growth in each business segment. Diluted earnings per share, excluding charges, are expected in the range of $0.56 - $0.91 per share. Q & A In today’s press release, Corporate and Other expenses are expected to be in the $17-25 million range. Bowne cited the increased costs of the Sarbanes-Oxley Act as impacting the company. Bowne has built an infrastructure to support the requirement of the Act, hired additional employees and has incurred consulting expenses with the implementation of the Act. The company has also benefited from lower compensation expenses due to not paying out of corporate bonuses in 2003. Bowne has seen the impact of Sarbanes-Oxley in both the spring of 2003 and expects impact in the spring of 2004. The company is already seeing a 15-25% increase in page volumes through annul reports and 10K filings. Additionally accelerated 10K filings will lead to increased and larger documents than in the past. Margins in the Financial Print sector are expected at 15% for 2004 primarily due to overall volumes and timing. The increased level of activity Bowne is now experiencing could bring the company to the 15% margin projections. Margins in the Outsourcing segment are expected at 7% on the lower end with 7.8% the midpoint of the company’s range. Several factors will impact margins including, volume improvement with banks and law firms showing increased activity, litigation support improvement, increased desktop publishing clients and specifically reducing cost in the segment. Cost reductions have included removing a layer of management. Global Solutions segment margin improvement is 8.3% with the possibility of hitting 10% by the end of the year. Bowne has seen a trend of quarter to quarter improvement in this sector Capital expenditures are not expected to exceed $30 million in 2004. Transactional revenue accounted for 27%, of Bowne’s total revenue, or $69 million in the fourth quarter.