By Susan Kelly May 1, 2003 - Moore Corporation Ltd. (TSX, NYSE: MCL) Mississauga, Ontario, and Stamford, CT, today held their conference call for their first quarter 2003. Moore has recently been in the news with their announcement about the merger of Moore Corporation Ltd. and Wallace, Inc. Mr. Mark Angelson, CEO of Moore, opened the call with the statement that lawyers have asked him to limit his comments about the merger to the information presented in the S4 filing. Also, they will not be presenting at the NYSE on April 30th, 2003 as Toronto personnel will not be attending given the recent WHO alert. Wallace shareholders will be asked to vote on the merger on May 15th, 2003 and the plans are to finish the deal closing as soon as possible after the vote. Once the legal restrictions have been lifted and the vote has taken place, Moore will hold another conference call to inform the financial community of their restructuring plans for Moore Wallace. For the first quarter 2003, Moore Corporation reported revenues of $511.1 million compared to $529.5 million in the same quarter 2002. The net earnings for the first quarter 2003 were $29.2 million, or $0.26 per share, as compared to net earnings of $12.5 million, or $0.11 per share, for the same quarter in 2002. Topics: * CEO Comments * Financial Summary * Q&A CEO Comments: Mr. Angelson initiated the conference call with introductory comments: "In the first quarter 2003, Moore again either met or exceeded internal targets across all market segments. Our results prove that a continued focus as a low cost producer and one-stop-shop cross-selling strategy continues to work." He also commented that: * Increased earnings 136% from same period last year due to cost containment actions, leveraged purchasing and technology expenditures. * Wallace provides a future launching pad for success. "The money for the merger was raised and in the bank before the bombs started dropping on Iraq. There have been no material adverse changes since then and its 17 days and counting until the deal is complete." * Reorganization announcement was made: Mr. Tom Quinlan has been appointed as the EVP of Business Integration. Financial Summary: Mr. Mark Hiltwein, Moore's Chief Financial Officer, reported additional financial performance indicators: * Nine straight quarters of positive results. Currently they have $189.6 million in debt and a $95 million net debt position mainly due to prepaid interest and acquisitions. * First quarter has $9.2 million for capital expenditures. * Organic growth was 7.0 % for the first quarter 2003. * SG&A Expenses were reduced to 21.2% from 23.5%, same quarter last year, as a percentage of sales. * The 3.5% decrease in sales in 2003 is due to divesture of non-core businesses, general economic conditions, purging of unprofitable customers, and devaluation of foreign currency. * Comments about free cash flow and EBITDA were not discussed due to the pending merger. Q&A 1. One analyst probed for Moore's free cash flow position and speculated the range to be $40-45 million but it was not substantiated by Moore executives. 2. Guidance for second quarter 2003 was given by the CFO with earnings per share expected to be $0.17. Revenues in fourth quarter 2002 were $499 million and the CFO cautioned that they will not achieve the same number in second quarter 2003 due to current economic conditions. 3. Detailed contingency plans have been crafted and are in place in the event Moore experiences a 5%-10%-15% decline in revenues. One analyst wanted more details about the contingency plans since they believe a reduction in expenses can not happen fast enough to compensate for quick revenue slides. Several Moore executives commented about their visibility into the workload across all segments and geographies and their ability to immediately adjust spending. Cost actions include: "black outs" and "brown outs" to shut down all or portions of facilities, mandatory vacations, releasing of temporary labor, and to cut discretionary spending. No direct answer was given about whether or not Moore has already implemented some of these actions in first quarter 2003. 4. Last year Moore won the United Healthcare contract valued at $200 million. Moore was questioned about their current sales pipeline for any other potential big wins on the horizon. Moore executives responded that they have a number of outstanding RFP's and that the sales wins have been in their outsourcing business. Many of these deals were consummated in fourth quarter 2002 and early first quarter 2003, but they were not to the same size of the UH contract. The CEO ended the discussion with "We're OK". 5. Forms and Label segment was down 4% in first quarter 2002 and an analyst wanted examples about customer wins and possible prospects for this business segment. Larger customers were down in total spending but were partially offset by 900 new customers from the middle market. Moore believes the addressable middle market opportunity for this business is $1.4 billion. 6. Headcount as of the end of 2002: 19,000 employees combined Moore & Wallace with approximately 11,500 from Moore. 7. With the conclusion of the war no improvement trends are apparent as yet; "customers are still on the sidelines." 8. The combined Moore and Wallace sales force is 1200-1500 people pre-synergies. When asked how this compares to competitors, such as Quebecor World, the Moore executives defended their business model and stated that they are not in the same businesses. "We need more feet on the street than the other commercial printers. There are no numbers to benchmark for this and we are not reliant on advertising spending. We are doing business with Fortune 100 companies and work with print management spending which requires a totally different sales approach." 9. Corporate expenses were down quarter over quarter. Year over year expenses were down 17% or $7 million. Imbedded in these numbers are IT costs, which are about 10% of the total spending and includes deferred software. Currently the total IT spend is $105 -$110 million, and Moore believes they can take that expense number down by another $15-30 million.