By Trevor Shackelford August 4, 2005 -- Bowne & Co., Inc. (NYSE: BNE) announced second quarter 2005 net income of $4.02 million dollars, or $0.11 per share, compared to $11.19 million, or $0.31 per share, during the same period last year. Results include a loss from discontinued operations of $3.8 million. The company reported revenue of $204 million in the second quarter, down slightly from $205 million in the same period last year. In June, the company announced the sale of its Global Solutions business to Lionbridge Technologies, Inc. According to the company, the move will allow management to turn its focus on improving and growing its core business of financial print. Topics of this Summary Quarter Highlights Segment Performance Guidance Raine Radar Q & A Quarter Highlights After months of telegraphing its desire to divest BGS (Bowne Global Solutions), the company sold the business to Lionbridge Technologies in June BGS would have increased EPS by $0.08 this quarter The slowing of capital market activity continues to negatively impact transactional revenues in financial print Gross margin down to 36.7% Segment Performance Bowne Financial Print This segment reported revenue of $197.6 million, up 1.6% from last year. Transactional revenue decreased 10%, offset by an 8% increase in non-transactional revenue. Profit as a percentage of sales was 14.7% for the quarter, down from 16.1% last year. Guidance The company revised its 2005 outlook to include the results from continued operations only. The revised outlook shows Bowne with 2005 revenues of $650 million to $695 million with diluted earnings per share of $0.30 - $0.40. In the company’s guidance, the segment profit for financial print was lowered from $70 million - $95 million down to $65 million - $75 million. Raine Radar Although there is certainly benefit to doing one thing and doing it well, (in this case financial print) there is also the distinct disadvantage of being tied to a single revenue source. Viewing the company from the outside, it’s impossible to know what other reasons were involved in the decision to divest BGS, but the company had some A-list clients and growth potential. The trends of what and how much print the market will buy is variable depending on the economy, regulations, and customer demand for electronic delivery. The ability to take a marketing campaign or a software company’s new suite and make it meaningful worldwide, however, has a clear trend line. It’s not just the gigantic multinationals anymore that have access to global markets, although they certainly still make up the majority. Lionbridge, with Rory Cowan at the helm, probably made a sweet deal. He did this once before when he bought RR Donnelly Language Solutions from RRD, went IPO, and has held on despite all the turbulent changes in technologies and markets. Now he’s back for more. Language and cultural localization is the next leap forward in content management for any firm looking to take their product or service outside of their home borders. Maybe Bowne made the right decision for Bowne, but looking at the updated guidance for financial print profit, it is hard not to doubt the logic of the sale for both parties. Q & A The question and answer session was extremely light on this call, with only one analyst participating. The first priority the company hopes to achieve after the sale of BGS is to devote more time and energy to improving customer service. The company believes this is the key to increasing value and therefore margins. Bowne would also like to curb some of the seasonality of the business. Bowne currently outsources 15%-20% of its work to India, and will work to continue to optimize what and how much business it sends offshore.