Bowne & Co. Reduces Q3 Operating Earnings Estimate, To Report Loss
Wednesday, October 02, 2002
NEW YORK, October 1, 2002 - Bowne & Co., Inc. today announced that it expects to report a loss from operations of $ .07 to $ .12 per share for the third quarter ended September 30, 2002 compared to previous estimated operating earnings of $ .00 to $ .10 per diluted share. In addition to the operating loss, earnings for the quarter will include a gain on the sale of real estate; a gain on the sale – also announced today – of the assets and business of Bowne’s securities publishing group to Aspen Publishers, Inc.; and the costs of the restructuring announced on September 5. Total earnings per share, including these items, are expected to be in the range of $ .12 to $ .17. The reduced estimate is due to less-than-anticipated transactional business in Bowne’s Financial Print division caused by unexpected customer delays and postponements of transactions, as well as a further adverse impact on Bowne’s Global Solutions (BGS) division due to delays of new software introductions and releases among the large number of BGS clients in the technology sector. Bowne Chairman and CEO Robert M. Johnson noted that the company, in its second quarter earnings release of August 7, and in the September 5 release regarding a restructuring and cost reductions, had emphasized continuing weakness in transactional financial printing and an unpredictable business climate as reasons for caution in the third and fourth quarters. “Today, we are experiencing the effect of that unpredictability and, thus, we continue to be cautious about the remainder of this year,” he said. “While we are still analyzing our third quarter financial results, we anticipate the loss from operations for the quarter will be in the range of 7 cents to 12 cents per share. We continue to take all necessary measures to manage effectively through this difficult business environment, including the wise use of our assets and the assurance that our resources are appropriately matched to realistic business prospects.” Johnson said that Bowne has taken these measures in recent weeks and months to deal with the business challenges: * Cutting $10 million in annualized costs and eliminating approximately 200 positions in Financial Print, representing about 2.5% of Bowne’s total workforce, as announced in the September 5 restructuring release. This was in addition to $70 million in annualized cost reductions made during 2001 as part of the company’s extensive streamlining and restructuring of its operations. * Reducing its reliance on the weak technology sector by acquiring Berlitz GlobalNet through its BGS division, a move designed to expand the breadth, depth and geographic scope of BGS’ service offerings in other industries. In the September 30 news release, BGS also announced the addition of a top global strategist and manager as the unit’s new Chief Operating Officer. * Selling the non-core securities publishing division, a unit that generated less than 1% of Bowne’s total annual revenue, for approximately $15 million and, thus, allowing Bowne to continue its focus on its primary core businesses. Johnson said Bowne would continue to maintain and expand its position as a leading information source on securities regulation and compliance issues, and planned to announce expanded electronic securities thought leadership initiatives in the next few weeks. * Moving forward with the company’s diversification strategy for future growth and to reduce reliance on transactional financial printing, which, as of the second quarter, was down to approximately 26% of the company’s total revenue. The balance of Bowne’s revenue is derived from non-transactional business involving longer-term contracts and recurring relationships. Late last year, Bowne launched its newest business unit, Bowne Enterprise Solutions, to capitalize on the emerging market for customized and personalized communications in financial services and other industries. Bowne Business Solutions, the company’s business process outsourcing unit, has continued to perform well in a difficult economic climate, Johnson said, and has become the leading provider of outsourcing services to law firms and investment banks. Bowne will announce its third quarter 2002 results on November 6 and hold a conference call for investors the following morning. In this news release, Johnson said, Bowne will provide more information about the third quarter results, as well as an outlook for the 2002 fourth quarter.