PALM BEACH, Fla.--Dec. 23, 2002-- Workflow Management, Inc., one of the nation's leading outsourcers of printed products, announced today its second quarter results. Second quarter revenues for the period ended October 31, 2002 increased 2.6% to $164.6 million compared to $160.3 million in the prior year. Revenues in the Solutions Division improved 2.8% to $81.2 million and revenues in the Printing Division increased 1.8% to $86.4 million. Second quarter operating income before restructuring costs was $8.7 million compared to $5.8 million last year. Workflow generated $11.4 million in EBITDA before restructuring costs in the second quarter, versus $8.5 million in the same period last year. Including restructuring costs, Workflow produced $10.6 million in EBITDA for the quarter versus $8.5 million in the prior year. Tom D'Agostino, Sr., Chairman and Chief Executive Officer, commented, "Workflow's attention to controlling costs, combined with our focus on adding new customers, resulted in improved financial performance despite tough economic and competitive forces. With the diverse Workflow platform, we are able to provide a myriad of cost saving solutions for our customers." Net income before non-recurring items in the second quarter of fiscal 2003 was $1.9 million, or $0.14 per diluted share, an increase of $473,000, or $0.03 per diluted share from the same period of fiscal 2002. In the quarter, the Company incurred non-recurring items totaling $2.1 million, or $0.10 per diluted share after taxes. After the charges, the Company generated net income of $517,000, or $0.04 per diluted share. The non-recurring items included $1.1 million of expense related to the loss on the Company's interest rate swap agreement which must be marked to market quarterly as the swap can no longer be designated as a cash flow hedge of variable rate debt due to the Company's borrowings under its credit facility bearing a non-LIBOR based fixed interest rate of 12%. In addition, $810,000 was incurred for continued restructuring costs and $174,000 was incurred in connection with the abandoned private placement of senior secured notes. Revenues for the six months ended October 31, 2002 increased 1.7% to $320.8 million compared to $315.5 million during the same period in fiscal 2002. Revenues in the Company's Solutions Division increased 2.0% to $157.9 million and the Printing Division rose 0.7% to $169.3 million. For the six months ended October 31, 2002, operating income before restructuring costs increased 19.2% to $15.7 million versus $13.2 million during the same period last year. Before restructuring costs, Workflow generated $21.0 million in EBITDA for the six months ended October 31, 2002 versus $18.7 million in the same period last year. Net income before non-recurring items for the first six months of fiscal 2003 was $3.6 million, or $0.28 per diluted share, as compared to $3.7 million, or $0.28 per diluted share in the same period of fiscal 2002. In the first six months of fiscal 2003, the Company incurred non-recurring items totaling $8.4 million, or $0.42 per diluted share after taxes. After the charges, the Company generated a net loss of $1.9 million, or $0.14 per diluted share. The Company also announced that it is in the process of finalizing a new long-term relationship with its lending group and looks forward to completing that process by January 15, 2003, the end of the current waiver period. The goal is to stabilize the Company's relationship with its lenders and strengthen its balance sheet.