PALM BEACH, Fla.--Aug. 16, 2002-- Workflow Management, Inc., one of the nation's leading outsourcers of printed products, announced today that a Special Committee comprised of independent members of its board of directors is actively considering various restructuring and other strategic and financial alternatives. The Special Committee has engaged Jefferies & Company, Inc., the principal operating subsidiary of Jefferies Group, Inc., as its financial and strategic advisor. Workflow Management also announced today that due to unfavorable market conditions, the Company is not actively pursuing a private placement of senior secured notes. If market conditions improve, the Special Committee, at its discretion, may elect to pursue this alternative. The Company previously announced an agreement with its secured lenders that waives certain covenant defaults under the Company's secured credit facility. The Company also previously announced an agreement in principle with its lenders to enter into a new credit facility that would bear interest at 12% and provide access to working capital based on a borrowing base formula. However, as part of its consideration of various financial and strategic alternatives, the Special Committee and its advisors are actively engaged in further discussions and negotiations with the Company's secured lenders. As a result, the Company's lenders have extended the waiver of the covenant defaults until October 15, 2002 so that the Company and the Special Committee, in consultation with its financial advisors, can consider and analyze various financial and strategic alternatives. As part of the current agreement between the Company and its lenders, the Company's outstanding borrowings on its existing credit facility bear interest at 12%. Tom D'Agostino, Sr., Chairman, President and CEO stated, "The work of the Special Committee and the hiring of Jefferies should be beneficial as we solidify the capital structure of the Company. The Special Committee, with the assistance of its financial advisors, will consider a number of financial and strategic alternatives designed to stabilize the Company and position management to deliver value over time." The Company also announced that it expects to record net non-recurring operating expenses of approximately $225,000 and non-recurring, non-operating expenses of approximately $6.0 million in the first quarter. In the aggregate, these expenses represent ($0.31) after-tax per diluted share. The specific non-recurring items are: * $1.7million of transaction costs incurred in connection with a proposed private placement of senior secured notes, which the Company has expensed as a result of the Company's decision not to actively pursue the transaction. * $4.3 million of expense related to the Company's interest rate swap agreement. This was expensed because the swap can no longer be designated as a cash flow hedge of variable rate debt. This is due to the fact that the Company's borrowings under its credit facility currently bear a non-LIBOR based fixed interest rate. * $1.5 million in restructuring costs associated with the exploration of other financial, restructuring and strategic alternatives. * The reversal to income of a $1.3 million restructuring charge, taken in the three months ended April 30, 2001, that is no longer required since the Company recently settled the underlying contract dispute. The Company now expects to report revenues in the range of $154.0 million to $156.0 million for the first quarter ended July 31, 2002, versus $155.2 million for the corresponding period in the previous year. In addition, the Company now expects to report diluted earnings per share of approximately $0.11 to $0.13 for the first quarter, excluding the one-time expenses discussed above, compared to earnings per share of $0.18 for the same period last year. Including one-time items, Workflow Management expects the loss per share for the first quarter to range from ($0.18) to ($0.20). Mr. D'Agostino, Sr. concluded, "Over the past several years we have successfully expanded our business to the point where we are currently one of the largest print outsourcers in North America. We recognize that the difficult economic conditions have magnified the competitive landscape and put additional pressure on our operations. We also understand that we must raise the bar with regard to our sales effort and execution to react to these circumstances. Although it is difficult to predict how quickly these trends will reverse, we are committed to implementing the necessary changes to take advantage of our human capital and industry experience."