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Bowne Announces Improved 2004 Results

Press release from the issuing company

NEW YORK, Feb. 17 -- Bowne & Co., Inc. today announced net earnings for 2004 of $27.5 million, or $0.77 per diluted share, versus a net loss of $7.7 million, or $0.23 per share, for 2003. For the fourth quarter ended December 31, 2004, net earnings were $20.1 million, or $0.56 per diluted share, versus a net loss of $3.0 million, or $0.09 per share, for the same period in 2003. Revenues for the year ended December 31, 2004 were $899 million, up 6.1% from $847.6 million reported for 2003. Fourth quarter 2004 revenues of $210.4 million compared to $196.2 million in 2003. These results include the net gain of $31.6 million on the sale of Bowne Business Solutions (BBS) and reflect BBS as a discontinued operation. Excluding the impact of the gain and the expenses related to the sale of BBS, restructuring charges, loss on extinguishment of debt, a litigation settlement, and the write-off of certain deferred tax assets, 2004 pro forma earnings per share was $0.37 as compared to a pro forma earnings per share of $0.31 in 2003. For the fourth quarter, the pro forma loss per share was $0.07 in 2004, as compared to 2003 pro forma earnings per share of $0.08. (See attached Pro Forma Supplemental Income Information for a reconciliation of these non-GAAP financial measures to our consolidated statements of operations.) "We believe our improving performance in 2004 has set the stage for a strong 2005," said Bowne Chief Executive Officer Philip E. Kucera. "Despite a fourth quarter that did not meet our expectations, we are optimistic about 2005, especially with the recent up tick in large M&A transactions. Our strategy remains focused on our core Financial Print business." David J. Shea, Bowne President and Chief Operating Officer, said, "In 2004, we were awarded six of the top ten M&A deals announced. Concerning BGS, the 2004 results were not in line with our original plans, as the expected rebound in spending by the IT sector failed to materialize as significant projects were delayed until 2005. We took action in the fourth quarter to rebalance our cost structure within BGS. The cost savings from these expense reductions, as well as a strong revenue backlog, will help us achieve our targets for 2005." Bowne Financial Print -- On a full year basis, Financial Print reported revenue of $637.4 million, a $46.6 million, or 7.9%, increase in revenue as compared to last year. Segment profit for the full year of 2004 of $69.0 million increased $7.1 million as compared to 2003. For the fourth quarter of 2004, financial print revenue of $143.4 million was up $10.6 million, or 8.0%, over the same period in 2003. Segment profit for the fourth quarter of 2004 was $6.8 million compared with $14.3 million in 2003. Bowne Global Solutions (BGS) -- Full year revenue of $223 million was $3.7 million higher than 2003, while segment profit of $9.6 million was $3.5 million lower than 2003. Fourth quarter revenue of $55.1 million was up slightly as compared to 2003, while segment profit for the fourth quarter of 2004 of $1.5 million was lower by $2.4 million as compared to 2003. Corporate/Other -- Corporate spending increased primarily due to the requirements of the Sarbanes-Oxley Act. Highlights of the fourth quarter were the integration of Tri-Coastal Legal Technologies and the completion of a major litigation consulting project within our DecisionQuest business. Through an Overnight Share Repurchase program with Bank of America, Bowne repurchased 2,530,000 shares on December 2, 2004. In connection with the program, Bank of America has been purchasing, and will continue to purchase, shares in the market over the next six to nine months. At the end of the program, Bowne will receive or pay a price adjustment based on the volume weighted average price of shares acquired during the purchase period. As of December 31, 2004, Bank of America purchased 442,800 shares in the open market at an average price of $15.55. Bank of America has purchased a total of 938,800 shares at an average price of $15.36 through February 15, 2005. Bowne continues to focus on cash flow and managing receivables. Days sales outstanding improved one day compared to December 2003. Cash provided by operations for the year ended December 31, 2004 improved $12.4 million to $32.7 million, from net cash provided by operations of $20.2 million in 2003. Net cash at December 31, 2004 was $2.2 million as compared to net debt of $123.5 million in December 2003. Financial Print work-in-process inventory was $15.1 million at December 31, 2004, as compared to $14.2 in December 2003. Business Outlook The company noted that forward-looking statements of future performance contained in the foregoing and in the following statements and certain statements made elsewhere in this release are based upon current expectations and are subject to factors that could cause actual results to differ materially from those suggested here, including demand for and acceptance of the company's services, new technological developments, competition and general economic or market conditions, particularly in the domestic and international capital markets, and excludes the effect of potential dilution from the Convertible Subordinated Debt and the impact from any future purchases under our share repurchase program.