NEW YORK, NY, Nov. 4, 2009 (Marketwire) --

NEW YORK, NY -- (Marketwire) -- 11/04/09 -- Bowne & Co., Inc. (NYSE: BNE)

--  Segment Profit of $3.8 Million Represents an $11 Million Improvement
    Over 2008
--  Equity Offering and Amended Credit Facility Strengthen Capital
    Structure
--  Reinstatement of Cash Dividend
    

Bowne & Co., Inc. (NYSE: BNE), a global leader in shareholder and marketing communications services, today announced third quarter and year-to-date operating results.

Revenue was $148.8 million in the third quarter of 2009 compared to $164.0 million in the third quarter of 2008, a decline of $15.2 million, or 9%. In the third quarter of 2009, the Company generated gross profit of $48.3 million, with a 32.5% gross margin contribution, compared to $42.1 million and a 25.7% gross margin contribution in the prior year period. Segment profit and segment profit margin were $3.8 million and 2.5%, respectively, in the third quarter of 2009, compared to a loss of ($7.4) million and (4.5%), respectively, in the third quarter of 2008. Loss from continuing operations was ($7.4) million, or ($0.21) per diluted share, compared to ($17.7) million, or ($0.62) per diluted share, in the third quarter of 2008.

For the nine months ended September 30, 2009, revenue was $506.8 million, down $102.9 million or 17% from $609.7 million reported for the first nine months of 2008. In the first nine months of 2009, the Company generated gross profit of $168.5 million with a 33.3% gross margin contribution, compared to $199.6 million and a 32.7% gross margin contribution in the comparable prior year period. Segment profit and segment profit margin were $35.6 million and 7.0%, respectively, in the first nine months of 2009 compared to $35.4 million and 5.8% in the first nine months of 2008. Loss from continuing operations was ($13.0) million, or ($0.43) per diluted share for the nine months ended September 30, 2009, compared to ($14.9) million, or ($0.52) per diluted share, in 2008.

Pro forma results from continuing operations totaled a loss of ($4.5) million in the third quarter of 2009 and break-even for the 2009 year-to-date period (despite a $102.9 million decline in revenue), compared to a loss of ($12.4) million and income of $3.0 million, respectively, in the comparable prior year periods. This resulted in diluted earnings/(loss) per share of ($0.13) in the third quarter of 2009 and $0.00 for the 2009 year-to-date period, compared to ($0.43) and $0.10, respectively, in the comparable 2008 periods. (See Pro Forma Supplemental Income Information for a reconciliation between the non-GAAP financial measures and the Company's Condensed Consolidated Statements of Operations.)

"Despite the current recessionary environment in the industries we service and its effect on our revenue levels, we are very pleased with our improved profitability. These improvements are a direct result of our continuing efforts to reduce costs and increase the efficiency of our operating model," said David J. Shea, Chairman and Chief Executive Officer. "During the third quarter, we took a number of steps to strengthen our capital structure including (a.) the successful execution of a secondary offering; (b.) the amendment of our revolving credit facility last month; and (c.) the extension of the credit facility's maturity through May 2013. We're also encouraged by increased momentum in the capital markets, and remain cautiously optimistic that activity will be stronger in the fourth quarter, particularly in the U.S. and Asia."

Additional comments on the operating results in the third quarter and year-to-date 2009 are provided below.

Revenue:

Capital markets services revenue was $44.1 million for the third quarter of 2009, which is $1.7 million, or 4%, higher than the comparable 2008 period, reflecting improvements in the U.S. and in Asia. For the first nine months of 2009, capital markets services revenue was $102.3 million, which is $56.4 million or 35.5% lower than the first nine months of 2008. This decrease is directly related to the declines in overall IPO and M&A activity, which were particularly pronounced in the international markets. Included in capital market services revenue is Bowne Virtual Dataroom™ (VDR) revenue, which was $2.9 million for the third quarter and $9.0 million for the year-to-date periods in 2009. That compares to $3.6 million and $10.3 million for the comparable periods in 2008.

Shareholder reporting services revenue, which includes compliance reporting, investment management services and translations services revenue, was $65.1 million and $277.7 million for the third quarter of 2009 and year-to-date periods, declines of 10% and 8%, respectively, compared to the comparable 2008 periods. For the third quarter of 2009 and year-to-date periods, compliance reporting revenue decreased approximately 7% and 9%, respectively. Investment management services revenue decreased 8% and 4% during the third quarter and the first nine months of 2009, respectively. The decrease in revenue from shareholder reporting services is primarily the result of pricing pressure and reduced print volumes. Additionally, there was a decline in the number of public filers (due to bankruptcies and consolidations), partially offset by the addition of new clients and increased services to certain existing clients in 2009.

Marketing communications services revenue decreased $7.8 million, or 19%, to $34.3 million during the third quarter of 2009, and decreased $15.8 million, or 13%, to $108.8 million during the first nine months of 2009. The decline is primarily due to the loss of certain accounts; lower activity levels and volumes from existing clients, as companies reduced their marketing spending in the current economic downturn; and declines in client enrollment activities for health care and financial products, such as 401(k) enrollments.

Segment Profit: The Company generated segment profit of $3.8 million in the third quarter 2009 and $35.6 million year-to-date, compared to a segment loss of ($7.4) million in the third quarter of 2008 and profit of $35.4 million in the first nine months of 2008. The Company's segment profit margin in the quarter and 2009 year-to-date periods was 2.5% and 7.0%, respectively.

Cost Reduction Initiatives: Bowne continues to be proactive in reducing its fixed costs and consolidating operations, which have positioned the Company to respond to changing economic conditions and to compete more effectively.

During the first nine months of 2009, the Company implemented initiatives to reduce its workforce and facility costs as part of its continued focus on improving its cost structure and realizing operating efficiencies. These cost reductions were in addition to the cost savings initiatives taken during 2008, which continue to positively impact this year's operating results. The Company estimates that the cost savings that will be achieved in fiscal year 2009 as a result of these initiatives are in the range of approximately $50 to $60 million.

Balance Sheet and Cash Flow: Cash and marketable securities at September 30, 2009 increased $4.8 million from December 31, 2008. Net cash provided by operating activities was $6.3 million for the nine months ended September 30, 2009, compared to net cash used in operating activities of $23.2 million for the nine months ended September 30, 2008.

Average days sales outstanding was 71 days as of September 30, 2009 compared to 70 days as of September 30, 2008. Work-in-process inventory was $19.4 million at September 30, 2009, compared to $19.6 million at September 30, 2008.

As of September 30, 2009, the Company had $25.0 million outstanding under its $123 million revolving credit facility and $8.3 million outstanding under the Company's Convertible Subordinated Debentures. The Company was in compliance with its debt covenants as of September 30, 2009.

As previously announced, during the third quarter the Company completed a public equity offering, which resulted in the issuance of 12.075 million shares of common stock for net proceeds of $67.8 million. The net proceeds from the offering were used to repay the Company's term loans, which totaled $24.2 million, in their entirety, and to repay a portion of the Company's borrowings under its revolving credit facility.

In addition, on October 20, 2009, the Company announced that it had amended its revolving credit facility and extended its maturity through May 2013. This amended facility provides the Company with more favorable debt covenants, increased financial flexibility related to cash dividends and acquisitions, and retains the total committed amount of the existing revolving credit facility at $123.0 million. As a result of the amendment, on October 23, 2009, the Company announced that it will reinstate its cash dividend in the fourth quarter at the rate of $0.055 per share.

Business Outlook:

The Company had previously adjusted its 2009 business outlook in its second quarter earnings announcement released in August 2009, and expects full year results to be in the range presented.

The Company notes that forward-looking statements of future performance made 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.

Bowne & Co., Inc. will hold its earnings conference call to review its 2009 third quarter results on Thursday, November 5, 2009, at 11:00 a.m. Eastern Time. To join the Webcast, log on to http://www.bowne.com. To access the call via telephone, please dial (877) 407-0782 (domestic) or (201) 689-8567 (international), conference ID #336187.

About Bowne & Co., Inc.

Bowne & Co., Inc. (NYSE: BNE) provides shareholder and marketing communications services around the world. Dealmakers rely on Bowne to handle critical capital markets communications with speed and accuracy. Compliance professionals turn to Bowne to prepare and file regulatory and shareholder communications online and in print. Investment managers and third party fund administrators count on Bowne's integrated solutions to streamline their document processes and produce high quality communications for their shareholders. Marketers look to Bowne to create and distribute customized, one-to-one communications on demand.