EPS of $0.13, Excluding Non-Recurring Items, Surpasses First Call Estimate PALM BEACH, Fla.--Sept. 12, 2002--Workflow Management, Inc., a premier provider of printed products and outsourced services, today reported results for the first quarter ended July 31, 2002. First quarter revenues for the period ended July 31, 2002 increased to $156.2 million compared to $155.2 million in the prior year. Revenues in the Solutions Division improved 1.2% to $76.7 million, while revenues in the Printing Division decreased 0.5% to $82.9 million. First quarter operating income was $7.0 million before non-recurring items, compared to $7.4 million last year. Workflow generated $9.7 million in EBITDA excluding non-recurring items in the first quarter, versus $10.1 million in the same period last year. Tom D'Agostino, Sr., Chairman and CEO, commented, "We were encouraged by the stability of our operating results in the first quarter, traditionally our slowest period, despite tough economic and competitive forces. While customers are purchasing less product, Workflow is focused on both adding new customers and retaining its current customers as we maximize the efforts of our sales and sales support professionals and utilize the iGetSmart sales process. Because of the soft economic environment, more companies are considering outsourcing their non-core competencies than ever before. As a result, although the sales cycle is relatively long, the pipeline at our Solutions Division is robust. We attribute the increase to our iGetSmart model, which is successfully helping companies such as Deutsche Bank, Grainger and Federated Department Stores maximize the benefits of outsourcing, thereby translating directly into cost savings for our customers." Net income before non-recurring items in the first quarter of fiscal 2003 was $1.7 million, or $0.13 per diluted share, down from $2.3 million, or $0.18 per diluted share in the same period of fiscal 2002. In the quarter, the Company incurred significant non-recurring items totaling $6.3 million, or $0.31 per diluted share after taxes. After the charges, the Company incurred a net loss of $2.4 million, or $0.18 per diluted share. The non-recurring items were: * $1.7 million 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 at this time due to adverse market conditions. * $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, as the Company's borrowings under its credit facility currently bear a non-LIBOR based fixed interest rate of 12%. * $221,000 for net restructuring costs representing approximately $1.2 million in restructuring costs associated with the exploration of other financial, restructuring and strategic alternatives and 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 successfully settled the underlying contract dispute. As previously disclosed, Workflow has formed a Special Committee comprised of independent members of its board of directors to consider 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. In addition, the Special Committee has engaged Palisades Associates to review and evaluate the entire Corporation's operations in an effort to seek strategic improvements that could be implemented to improve cash flow and earnings. D'Agostino, Sr., concluded, "Strengthening the capital structure of Workflow is paramount as we position the Company to achieve its long-range operational goals. We have been proactive in exploring various restructuring and other strategic alternatives and believe that the Company is taking the proper initiatives to deliver long-term value for our shareholders." Chairman and Chief Executive Officer Tom D'Agostino, Sr., and Chief Financial Officer Mike Schmickle will certify to the U.S. Securities and Exchange Commission (SEC), the accuracy of Workflow's Form 10-Q report for the first quarter of fiscal 2003 on September 13, 2002.