By Trevor Shackelford November 28, 2006 -- Bowne & Company Inc. (NYSE: BNE) recently announced improved results from continuing operations over 2005. For the quarter, revenue increased 15.0% to $175.1 million from $152.3 million and diluted earnings per share from continuing operations improved to $0.01 from a loss of $0.04 in the third quarter of 2005. Including a charge from discontinued operations, the company posted a loss of $11.8 million or $0.38 per share. For the nine months ended September 30, 2006, revenue was $641.2 million, up 26.0% from $509.9 million reported in 2005. Income from continuing operations was $11.9 million, as compared to $7.0 million for the same period last year, a 71.0% increase, with resulting diluted earnings per share of $0.37 as compared to $0.20 in 2005, an 85.0% increase. Contents of this Summary • Quarter Highlights • Segment Performance • Guidance • Raine Radar • Q & A Quarter Highlights • Selling and administrative expenses were $51.3 million, compared to $45.7 million in the same quarter a year ago. • Accounts receivable increased $27.3 million since year-end due to the increased revenue levels and normal cyclical trends. • Day’s sales outstanding increased to 76 days in the third quarter 2006 from 74 days in September 2005. • From the inception of the company's share repurchase program in December 2004 through September 30, 2006, Bowne has spent approximately $131.0 million, buying back 8.9 million shares at an average price per share of $14.66. • Cash and marketable securities declined $98.9 million. This decline includes the funding of $53.3 million in stock repurchases, $33.0 million for acquisitions and $22.1 million in capital expenditures. Segment Performance Financial Print Segment Third quarter revenue increased to $148.0 million as compared to $143.2 million for the same period last year. Transactional revenue increased 9.0% primarily due to an increase in the company's market share. Segment profit for the quarter of $15.3 million increased $3.0 million, or 24.8% compared to the same period in 2005. On a year-to-date basis, segment profit of $77.2 million increased $12.4 million, or 19.1%, and as a percentage of revenue was 14.2% compared to 13.5% for 2005. Marketing & Business Communications Segment The segment reported revenue of $27.1 million and $96.7 million for the third quarter and year-to-date, respectively. Due to the seasonality of the business, the second and third quarters generally represent the lowest level of business activity during the year. Segment profit for the quarter was a loss of $2.3 million and $2.6 million year-to-date, and includes certain non-recurring costs associated with the integration of operations. These results compare to losses of $2.7 million and $5.6 million in the comparable 2005 periods. Discontinued Operations Segment During the quarter the company completed the sale of DecisionQuest. The 2006 third quarter loss of $12.1 million from discontinued operations includes the $5.1 million loss, net of tax, from the sale, and a $4.9 million charge, net of tax, for the costs associated with exiting the leased facilities of DecisionQuest and Bowne Business Solutions. The year-to-date loss, net of tax, of $15.9 million includes the aforementioned items, a $6.0 million gain, net of tax, on the sale of CaseSoft (a joint venture investment held by DecisionQuest which was sold in May 2006), and a $10.0 million goodwill impairment charge, net of tax, recorded in the second quarter related to DecisionQuest. Guidance Consistent with the company's policy of adjusting annual guidance unless when it believes the actual results will be materially outside the range provided, Bowne is adjusting downward MBC's expected 2006 full-year segment profit range. Previously, Bowne had forecast a range of $2 million to $9 million which it is now adjusting to a range of a loss of $1 million to a $1 million profit. Raine Radar Based on charges related to the sale of its DescisionQuest business unit, the company posted a loss this quarter. The company is continuing to refocus on financial print, and both revenue and profit for that segment saw an increase this quarter. The marketing and business communications segment continues to see losses, and will hopefully improve next quarter based on seasonality. Q & A 1. The company announced an extended One Net service contract with AT&T. Under the new $2 million two-year contract, AT&T will provide a bundled offering of voice, frame relay, and network services to support 60 global and domestic Bowne locations. 2. Bowne expects by early next year that the Vestcom integration related charges will be out of the way and the numbers will show base operations. Bowne was not able to give guidance on capital spending for 2007. 3. With the new CFO taking over in the fourth quarter the company stated that the new CFO has the same ideas and that strategies will remain the same as they have in the past.