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Workflow Management Provides Credit Facility Update, Potential Buyers Lurk

Press release from the issuing company

July 22, 2003 -- As previously announced in a release dated June 25, 2003, Workflow Management Inc. has been contacted by a large number of third parties who have expressed a desire to explore transactions ranging from investments in Workflow to an acquisition of the Company at a premium to the current market price. In light of these inquiries, the Board and the financial advisor to the Company and the Board's Special Committee, Jefferies & Company, Inc., are exploring a number of potential strategic alternatives to improve the Company's capital structure, including a potential recapitalization or sale of the Company. The Special Committee has directed Jefferies & Company to vigorously explore available alternatives and to actively engage in discussions with interested third parties. However, the Company is not a party to any written agreements with any third parties regarding these potential transactions nor is the Company negotiating any specific transaction terms with any particular third party at this time. There can be no assurance that any transaction will occur, and, if any transaction occurs, what the structure or terms of such transaction would be. Unless otherwise required by applicable securities laws, the Company does not expect to make any further public announcements regarding any potential transactions. ---- Workflow Management Inc. has reached an agreement in principle with its senior lenders on the terms of an amendment to the Company's credit facility. The amendment is still subject to final approval by both parties and the execution of definitive legal documents, which is anticipated in the next few weeks. In addition to addressing various financial covenant issues discussed below, the agreement reached with the lenders would amend the maturity dates of the various components of the credit facility debt in order to provide the Company greater flexibility to pursue strategic alternatives, as previously announced and as discussed below. The Company had previously announced its expectation that the Company's fiscal 2003 audited financial statements would include a going concern opinion as a result of the $50 million of credit facility debt due December 31, 2003. However, in the event the maturity dates of the credit facility are modified in a manner consistent with the agreement in principle reached by the Company and its lenders, the Company anticipates that its auditors' opinion for its fiscal 2003 financial statements will not include an uncertainty related to the Company's ability to continue as a going concern. At April 30, 2003, the Company had exceeded covenants in its credit facility that limited capital expenditures and the incurrence of restructuring costs. As a result of the Company's integration of certain operations earlier than anticipated, the Company exceeded the capital expenditure covenant by approximately $600,000 and due to the Company's decision to more aggressively restructure its operations than originally anticipated, the Company exceeded its restructuring cost covenant by $1.1 million. The Company's lenders have agreed to forebear from exercising any remedies related to these covenants through July 31, 2003 and, as part of the agreement in principle discussed above, the Company is working with its lenders to obtain appropriate amendments to the credit facility with respect to these and other covenants. In addition to amendments and waivers related to the capital expenditure and restructuring cost covenants discussed above, the Company is also working with its lenders to amend the calculation of EBITDA for credit facility covenant purposes to exclude the impact of goodwill impairment and the results of discontinued operations.

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