NEW YORK, Nov. 8 /PRNewswire/ -- Bowne & Co., Inc. (NYSE: BNE) today announced operating results for the three months ended September 30, 1999. Net sales for the quarter reached $240,350,000 compared to $225,420,000 for the quarter ended September 30, 1998, a 7 increase.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter increased 10 to $26,370,000 from $24,026,000 for the third quarter 1998, which included a one-time charge of $6,000,000 for purchased in-process research and development pertaining to the acquisition of Donnelley Enterprise Solutions Incorporated. Net income for the quarter was $5,644,000, compared to $1,452,000 for the quarter ended September 30, 1998. Diluted earnings per share were $0.15 compared to $0.04 in the quarter ended September 30, 1998.
For the nine months ended September 30, 1999, net sales were $731,506,000, an increase of 14 as compared to $639,033,000 for 1998, while EBITDA decreased 8 to $83,690,000 from $90,560,000 in 1998, which included a charge for purchased in-process research and development. Net income for the nine months ended September 30, 1999, was $20,550,000. Diluted earnings per share were $0.56 compared to $0.79 for the nine months ended September 30, 1998.
Robert M. Johnson, chairman and chief executive officer of Bowne said, "While the level of financial print activity in the third quarter was better than last year, we certainly did not enjoy the same robust levels as the second quarter of 1999, in part due to the typical summer slowdown in financial print markets. We are cautious about the fourth quarter activity in transactional print, as the impact of Y2K concerns on the equity markets makes the end of the quarter uncertain. However, our market share lead remains strong and should insure that we benefit from the M&A and IPO activity that does occur."
"Our digital print solution, whose results are included with financial printing, experienced a $6,000,000 increase in revenues over 1998 on a year-to-date basis, but lower EBITDA results of $3,000,000. Our recently opened, state-of-the-art digital print and fulfillment center supports our commitment to provide customers, particularly in the financial services sector, with the most innovative and customized digital printing and statement processing solutions. By investing in our own on-demand printing capabilities, we believe we now have the competitive advantage to be the total solution provider in the digital print arena," Johnson said.
"Overseas, we continue to experience record revenue levels. Our international financial print revenues, on a year-to-date basis, have increased 24 over last year, and revenues in the current quarter are up 52 from last year. Our newly opened Tokyo office has allowed us to develop a leading market share in a 'big-bang-like' environment, particularly in the high-tech sector. We have also expanded in Paris and Frankfurt to take advantage of opportunities in both financial printing and translation work resulting from the advent of the euro."
Mr. Johnson said, "We are pleased with the results in our localization business as we show a year-to-date EBITDA improvement of $6,000,000 over 1998 and $1,000,000 in the third quarter. We continue to see the positive improvement trend as we have said all along, not only on the revenue front, but also on an operating EBITDA basis. We believe these results compare extremely favorably with the competition in this market." Mr. Johnson added, "While revenue growth in our Internet consulting and development solution has temporarily slowed, we are certainly encouraged by significant new contracts and strategic alliances formed in the third quarter with companies such as: Fleet Capital Leasing, Broadvision, IBM, Oracle, and WRQ and remain confident that we will be seeing industry average or better levels of revenue growth in 2000."
Mr. Johnson continued, "A review of Bowne Global Solutions' position of competitive strength, comparing both revenue growth and EBITDA performance with similar publicly traded companies in the software and web localization market, leads us to believe that our shareholders are not realizing the value of this asset in our share price. As a result, we are engaged in active discussions with an outside advisor to review available options in order to realize appropriate value for this asset.
"Our Outsourcing services reached a record revenue level in the third quarter, increasing 4.4 over the second quarter and 26 over 1998. We believe this demonstrates the accelerating demand for business services and technology outsourcing as more businesses seek outside expertise in the management of increasingly complex, crucial business and technology requirements," Johnson concluded.
The Company stated that it is continuing its focus on managing receivables and inventory. Days outstanding remained flat to the comparable 1998 period and financial printing work-in-process inventory increased to $27,027,000 from $19,435,000 at December 1998 and decreased from $28,313,000 at September 1998. A significant portion of net cash provided by operating activities was used to fund the increases in working capital.
Bowne & Co., Inc., established in 1775, is the global market leader in the field of empowering information by combining superior customer service with appropriate new technologies to manage, repurpose and distribute a client's information to any audience, through any medium, in any language, anywhere in the world. The world's largest financial printer, Bowne is also the leading provider of localization services to the software industry, and among the leading Internet development companies, providers of outsourcing services,
legal software and digital print-on-demand solutions
The Company noted that forward-looking statements for future performance like those given above are, of course, 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.
BOWNE & CO., INC.
(NYSE: BNE)
Condensed Consolidated Statements of Income
Three Months Ended September 30,
(in thousands, except per share data)
1999 1998 Net sales $240,350 $225,420 Expenses: Cost of sales 143,791 130,488 Selling and administrative 69,757 66,161 Depreciation 10,294 9,712 Amortization 2,690 2,636 Purchased in-process research and development (1) -- 6,000 226,532 214,997 Operating income 13,818 10,423 Interest expense 1,751 2,960 Other expense/(income), net 432 (1,255) Income before income taxes 11,635 8,718 Income taxes 5,991 7,266 Net income $5,644 $1,452 Earnings per share: Basic $0.15 $0.04 Diluted $0.15 $0.04 Average shares outstanding: Basic 36,863 36,727 Diluted 37,630 37,795 Dividends per share $.055 $.055
Note 1: The results for 1998 include a charge of $6,000,000 for purchased
in-process research and development, not deductible for tax
purposes.
BOWNE & CO., INC.
(NYSE: BNE)
Condensed Consolidated Statements of Income
Nine Months Ended September 30,
(in thousands, except per share data)
1999 1998 Net sales $731,506 $639,033 Expenses: Cost of sales 435,069 347,261 Selling and administrative 213,427 195,126 Depreciation 30,309 24,341 Amortization 8,530 4,733 Purchased in-process research and development (1) -- 7,200 687,335 578,661 Operating income 44,171 60,372 Interest expense 5,573 3,940 Other (income), net (680) (1,114) Income before income taxes 39,278 57,546 Income taxes 18,728 27,689 Net income $20,550 $29,857 Earnings per share: Basic $0.56 $0.82 Diluted $0.55 $0.79 Average shares outstanding: Basic 36,827 36,631 Diluted 37,680 37,790 Dividends per share $.165 $.145
Note 1: The results for 1998 include a charge of $7,200,000 for purchased
in-process research and development charges, not deductible for
tax purposes.
BOWNE & CO., INC.
(NYSE: BNE)
Condensed Consolidated Balance Sheets
September 30, December 31, (in thousands) 1999 1998 Assets Cash $20,151 $23,801 Marketable securities 7,988 391 Accounts receivable, net 240,499 188,470 Inventory 48,899 30,593 Prepaid expenses and other current assets 28,042 32,809 Total current assets 345,579 276,064 Property, plant and equipment, net 169,161 166,367 Goodwill and other intangibles, net 185,266 188,619 Other assets 10,148 11,248 Total $710,154 $642,298 Liabilities and Stockholders' Equity Current portion of long-term debt and short-term borrowings $5,832 $4,578 Accounts payable and accrued liabilities 159,488 157,922 Total current liabilities 165,320 162,500 Long-term debt 114,110 74,887 Deferred employee compensation, benefits and taxes 32,813 26,092 Stockholders' equity 397,911 378,819 Total $710,154 $642,298
BOWNE & CO., INC.
(NYSE: BNE)
Condensed Consolidated Statements of Cash Flows
(in thousands) Nine Months Ended September 30, 1999 1998 Cash flows from operating activities: Net income $20,550 $29,857 Depreciation and amortization 38,839 29,074 Other (58,939) (29,641) Net cash provided by operating activities 450 29,290 Cash flows from investing activities: Acquisitions of businesses, net of cash acquired (6,092) (126,267) Purchase of property, plant and equipment (35,095) (32,158) Other (317) (1,220) Net cash used in investing activities (41,504) (159,645) Cash flows from financing activities: Proceeds from borrowings, net of payments 43,003 125,576 Payment of dividends (6,083) (5,325) Other 484 1,813 Net cash provided by financing activities 37,404 122,064 Decrease in cash and cash equivalents ($3,650) ($8,291)
BOWNE & CO., INC.
(NYSE: BNE)
Segment Information
(in thousands) Three Months Ended September 30, 1999 1998 Revenues: Financial Printing $181,178 $173,239 Outsourcing 40,663 32,264 Localization 16,162 15,664 Internet Consulting & Development 2,347 4,253 240,350 225,420 EBITDA: Financial Printing 28,506 32,970 Outsourcing 2,369 70 Localization (491) (1,556) Internet Consulting & Development (3,582) (2,712) Other (432) (4,746) 26,370 24,026 Depreciation expense: Financial Printing 7,503 7,371 Outsourcing 1,582 1,452 Localization 830 677 Internet Consulting & Development 379 212 10,294 9,712 EBITA: Financial Printing 21,003 25,598 Outsourcing 787 (1,382) Localization (1,321) (2,233) Internet Consulting & Development (3,961) (2,924) Other (432) (4,746) 16,076 14,314 Amortization (2,690) (2,636) Interest (1,751) (2,960) Income before income taxes $11,635 $8,718
BOWNE & CO., INC.
(NYSE: BNE)
Segment Information
(in thousands) Nine Months Ended September 30, 1999 1998 Revenues: Financial Printing $564,095 $548,094 Outsourcing 115,514 44,770 Localization 42,952 36,600 Internet Consulting & Development 8,945 9,569 731,506 639,033 EBITDA: Financial Printing 92,467 119,654 Outsourcing 5,858 (4,506) Localization (4,182) (10,421) Internet Consulting & Development (11,133) (8,081) Other 680 (6,086) 83,690 90,560 Depreciation expense: Financial Printing 22,016 19,949 Outsourcing 4,861 1,936 Localization 2,369 1,895 Internet Consulting & Development 1,063 561 30,309 24,341 EBITA: Financial Printing 70,451 99,705 Outsourcing 997 (6,442) Localization (6,551) (12,316) Internet Consulting & Development (12,196) (8,642) Other 680 (6,086) 53,381 66,219 Amortization (8,530) (4,733) Interest (5,573) (3,940) Income before income taxes $39,278 $57,546
Contact: William J. Coote, Treasurer of Bowne & Co., Inc., 212-886-0614.
