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Bowne Sees Revenue Jump of 32% in Q2

Monday, August 14, 2006

Press release from the issuing company

NEW YORK, NY, Aug 09, 2006 -- Bowne & Co., Inc. today announced 2006 second quarter earnings from continuing operations of $10.4 million as compared to $5.4 million for the second quarter of 2005. Earnings per diluted share from continuing operations were $0.30 compared to $0.15 for the same period last year. Revenue was $260.3 million in the second quarter of 2006, compared to $197.6 million in the comparable quarter of 2005. Financial Print revenue for the quarter increased $41.5 million over the second quarter of 2005, largely driven by a 45% increase in transactional revenue. For the six months ended June 30, 2006, income from continuing operations was $11.9 million versus $8.3 million for the same period last year. Earnings per diluted share from continuing operations was $0.35 for the six month period compared to $0.24 in 2005, a 46% increase. Revenue for the six months ended June 30, 2006 was $466.0 million, up 30% from $357.6 million reported in 2005. Pro forma diluted earnings per share from continuing operations for the quarter of $0.41 increased $0.23, or 128%, over the second quarter of 2005. Year-to-date pro forma diluted earnings per share from continuing operations of $0.53 was $0.24, or 83% greater than the comparable 2005 period. (See Pro Forma Supplemental Income Information attached hereto for a reconciliation of these non-GAAP financial measures to our Condensed Consolidated Statements of Operations.) "Our focus on our core businesses resulted in a solid performance this quarter," said Bowne Chairman and Chief Executive Officer Philip E. Kucera. "Overall, revenue growth was impressive, driven by strong organic growth in Financial Print and the revenue generated by the Vestcom business we acquired." David J. Shea, Bowne President and Chief Operating Officer, added, "This was a great quarter for Bowne. Financial Print revenue is up in all categories, with transactional revenue reaching its highest level since 2002. Total Financial Print revenue was at its highest level since 2000. Marketing & Business Communications substantially completed the integration of its two businesses ahead of schedule and is well-positioned for the second half of the year." Bowne Financial Print: Financial Print reported second quarter revenue of $229.9 million, compared to $188.4 million for the same period last year, an increase of 22.0%. Transactional revenue increased 45.4% due to a healthy capital market and increased market share. Non-transactional revenue, which includes mutual fund and compliance reporting revenue, increased 10.8% over 2005. Segment profit for the quarter as a percentage of revenue was 18.7%, compared to 16.5% for the same period in 2005. Marketing & Business Communications (MBC): The 2006 results include the acquisition of the Marketing and Business Communications division of Vestcom International, which was completed in January 2006. MBC reported revenue of $30.3 and $69.7 million for the second quarter and year-to-date, respectively. Segment profit for the quarter was a loss of $2.5 million and $0.3 million year-to-date, primarily as a result of costs associated with the acceleration of the integration of its New Jersey operations. During the first half of the year, MBC signed or renewed 19 contracts. Discontinued Operations: In keeping with its strategy of focusing on its core businesses, the Company reclassified DecisionQuest and JFS Litigators Notebook(R) (JFS), which are being held for sale, as discontinued operations. The 2006 results from discontinued operations include a $9.9 million gain on the sale of CaseSoft (a joint venture investment held by DecisionQuest which was sold in May 2006), and a $13.3 million goodwill impairment charge related to DecisionQuest. The 2005 results from discontinued operations include DecisionQuest, JFS, DecisionQuest Discovery Services (which was sold in January 2006) and Bowne Global Solutions (which was sold in September 2005). Balance Sheet: Days sales outstanding increased to 73 days in June 2006 from 66 days in June 2005. Cash used in operations for the quarter ended June 30, 2006 increased $24 million to $56 million, from net cash used in operations of $32 million in 2005. The increase in DSO and cash used in operations was primarily the result of higher levels of activity during the first half of 2006 than the comparable prior year period. Financial Print work-in-process inventory was $21.6 million at June 30, 2006, as compared to $27.1 million at June 30, 2005. From the inception of the Company's share repurchase program in December 2004 through June 30, 2006, Bowne has repurchased 7.6 million shares at an average price per share of $14.75. In 2006 through June 30, the Company has repurchased 2.4 million shares at an average price per share of $14.51, of which approximately 1.6 million shares were purchased in the second quarter of 2006. As of August 4, 2006, the company had $74.4 million remaining for share repurchases. Business Outlook: The 2006 outlook remains unchanged, except that Litigation Solutions has been reported as discontinued operations.

 

 

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