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Von Hoffmann Announces Q1 Loss, Sales up 15%

Press release from the issuing company

ST. LOUIS, May 12 -- Von Hoffmann Corporation, a leading North American educational and commercial printer, today announced results for its first quarter ended March 31, 2004. Net sales for the first quarter of 2004 were $108.6 million, which represents an increase of 15.8% from $93.8 million in the prior year's quarter. Net loss for the first quarter of 2004 was $3.0 million compared to a net loss of $0.4 million for the first quarter of 2003. Adjusted earnings before income taxes, depreciation and amortization (adjusted EBITDA) were $17.0 million for the first quarter of 2004 compared to $15.5 million for the first quarter of 2003. The first quarter of 2004 net sales include $16.5 million contributed by Lehigh Press's educational book components and digital premedia services businesses. The Company's net sales in the four-color elementary and high school (ELHI) and higher education markets experienced strong performance with 19% and 13% increases, respectively, in the first quarter. In addition, the Company's net sales in the four-color non-education market continued to show growth with a 60% increase in the first quarter of 2004. However, the one and two-color market segments, both educational and non-educational, demonstrated double-digit decreases in net sales of 23% and 24%, respectively. These segments were impacted by strong prior year sales with one-time catalog and ELHI projects as well as a reduction in computer market activity. The improvement in adjusted EBITDA in the current quarter was principally driven by the inclusion of Lehigh Press of $5.9 million along with an improvement in our four-color markets offset by the reduced one and two-color market activity. Robert Mathews, President and Chief Executive Officer, noted, "The first quarter reflects a short-term improvement in the educational market as reflected at our book component and four-color facilities. Our targeted market strategy within our core educational product space and the four-color non-educational segments continue to confirm our sales direction. However, the Company continues to be challenged by a soft economy in the non- educational printing industry as demonstrated in the one and two-color market segments."