Cautionary Statement Concerning Forward Looking Statements

The Company desires to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 (the "1995 Act"). The 1995 Act provides a "safe harbor" for forward-looking statements to encourage companies to provide information without fear of litigation so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected.

This report includes and incorporates by reference forward-looking statements within the meaning of the 1995 Act. These statements are included throughout this report, and in the documents incorporated by reference in this report, and relate to, among other things, projections of revenues, earnings, earnings per share, cash flows, capital expenditures, working capital or other financial items, output, expectations regarding acquisitions, discussions of estimated future revenue enhancements, potential dispositions and cost savings. These statements also relate to the Company's business strategy, goals and expectations concerning the Company's market position, future operations, margins, profitability, liquidity and capital resources. The words "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will" and similar terms and phrases identify forward-looking statements in this report and in the documents incorporated by reference in this report.

Although the Company believes the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The Company's operations involve risks and uncertainties, many of which are outside the Company's control, and any one of which, or a combination of which, could materially affect the Company's results of operations and whether the forward-looking statements ultimately prove to be correct.

Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors including, but not limited to:

• the prolonged continuation or further deterioration of current credit and capital market conditions;

• the effect of economic conditions on capital markets and the customers the Company serves, particularly the difficulties in the financial services industry and the general economic downturn which has significantly deteriorated since the latter half of 2007;

• interest rate fluctuations and changes in capital market conditions or other events affecting the Company's ability to obtain necessary financing on favorable terms to operate and fund its business or to refinance its existing debt;

• continuing availability of liquidity from operating performance and cash flows as well as the revolving credit facility;

• a weakening of the Company's financial position or operating results could result in noncompliance with its debt covenants;

• competition based on pricing and other factors;

• fluctuations in the cost of paper, other raw materials and utilities;

• changes in air and ground delivery costs and postal rates and regulations;

• seasonal fluctuations in overall demand for the Company's services;

• changes in the printing market;

• the Company's ability to integrate the operations of acquisitions into its operations;

• the financial condition of the Company's clients;

• the Company's ability to continue to obtain improved operating efficiencies;

• the Company's ability to continue to develop services for its clients;

• changes in the rules and regulations to which the Company is subject;

• changes in the rules and regulations to which the Company's clients are subject;

• the effects of war or acts of terrorism affecting the overall business climate;

• loss or retirement of key executives or employees; and

• natural events and acts of God such as earthquakes, fires or floods.

Many of these factors are described in greater detail in the Company's filings with the SEC, including those discussed elsewhere in this report or incorporated by reference in this report. All future written and oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by the previous statements.

Overview

The Company's results for the first quarter of 2009 reflect the continued unfavorable economic conditions that were experienced in 2008. Total revenue for the three months ended March 31, 2009 decreased by approximately $39.7 million, or 19%, to approximately $169.1 million as compared to the same period in 2008. Revenue from capital markets services decreased approximately $24.7 million, or 49%, for the three months ended March 31, 2009, primarily due to the market-wide decline in priced initial public offerings ("IPOs") and reduced levels of merger and acquisition ("M&A") transactions as compared to the same period in 2008. In addition, revenue from shareholder reporting services and marketing communications decreased by approximately 11% and 4%, respectively, as compared to the same period in 2008. Diluted loss per share from continuing operations was ($0.07) for the three months ended March 31, 2009 as compared to diluted earnings per share of $0.05 for the same period in 2008.

On March 31, 2009, the Company entered into an agreement to amend its $150.0 million credit facility and extend its maturity to May 31, 2011. The amended facility has been restructured as an asset-based loan consisting of term loans of $27.0 million and a revolving credit facility of $123.0 million. The amended credit facility provides the Company with flexibility to manage through the current recessionary environment and positions it to capture revenue opportunities quickly when the markets return.

During the first quarter of 2009, the Company further reduced its workforce by approximately 200 positions, or 6% of the Company's total headcount. The reduction in workforce was a continuation of the cost savings initiatives implemented during 2008 and included a broad range of functions and was enterprise-wide. The Company recorded approximately $4.3 million of severance related costs associated with the workforce reductions for the three months ended March 31, 2009. In addition, the Company incurred costs of approximately $0.8 million related to costs associated with the closure of the Company's facility in Dominguez Hills, CA, and its digital print facilities in Kent, WA and Dallas, TX. These facilities are expected to be closed during the second quarter of 2009. The Company estimates that these actions will result in annualized cost savings of approximately $13.0 million, of which $12.5 million will be recognized in 2009.

In May 2009, the Company announced that it has implemented additional initiatives to achieve approximately $20.0 million in annualized cost savings through further reductions in its workforce and facility costs, as part of its continued focus on improving its cost structure and realizing operating efficiencies. These cost reductions are in addition to the cost savings initiatives taken during the past several years and the first quarter of 2009 and include the elimination of a total of approximately 250 positions, or approximately 8% of the Company's total headcount. The Company estimates that the related restructuring charges resulting from these actions will result in a second quarter pre-tax charge of $7.0 million to $8.0 million and cost savings in 2009 of approximately $10.0 million to $11.0 million.

The cost savings measures implemented during 2008 and the first quarter of 2009 were expected to result in incremental cost savings estimated at $56.0 million to $61.0 million in 2009. Including the expected benefits from the cost savings related to the May 2009 initiatives discussed above, the Company currently estimates that the incremental cost savings to be achieved in 2009 are approximately $70.0 million.

Items Affecting Comparability

The following table summarizes the expenses incurred for restructuring,
integration and asset impairment charges during the three months ended March 31,
2009 and 2008:


                                                                    Three Months
                                                                        Ended
                                                                      March 31,
                                                                  2009        2008

 Total restructuring, integration and asset impairment charges   $ 6,585     $ 2,555
 After tax impact                                                $ 3,959     $ 1,740
 Per share impact                                                $  0.14     $  0.06

The charges taken during the three months ended March 31, 2009 primarily represent costs related to the Company's headcount reductions and facility closures, as previously discussed, and integration costs of approximately $1.1 million primarily related to the Company's recent acquisitions, which are discussed in more detail in Note 2 to the Consolidated Financial Statements in the Company's annual report on Form 10-K for the year ended December 31, 2008. Further discussion of the restructuring, integration and asset impairment activities are included in the results of operations, which follows, as well as in Note 8 to the Condensed Consolidated Financial Statements.

Results of Operations


                                                          Three Months Ended March 31,                           Quarter Over Quarter
                                                              % of                            % of             Favorable/(Unfavorable)
                                               2009          Revenue           2008          Revenue          $ Change            % Change
                                                                                (Dollars in thousands)

Capital markets services revenue:
Transactional services                      $   22,681             13 %     $   47,270             23 %    $       (24,589 )            (52 )%
Virtual Dataroom ("VDR") services                2,890              2            3,044              1                 (154 )             (5 )

Total capital markets services revenue          25,571             15           50,314             24              (24,743 )            (49 )
Shareholder reporting services revenue:
Compliance reporting                            45,348             27           53,448             26               (8,100 )            (15 )
Investment management                           45,498             27           48,066             23               (2,568 )             (5 )
Translation services                             3,387              2            4,033              2                 (646 )            (16 )

Total shareholder reporting services
revenue                                         94,233             56          105,547             51              (11,314 )            (11 )

Marketing communications services revenue       41,769             25           43,480             21               (1,711 )             (4 )
Commercial printing and other revenue            7,532              4            9,426              4               (1,894 )            (20 )

Total revenue                                  169,105            100          208,767            100              (39,662 )            (19 )
Cost of revenue                               (110,070 )          (65 )       (138,163 )          (66 )             28,093               20
Selling and administrative expenses            (46,085 )          (27 )        (57,962 )          (28 )             11,877               20
Depreciation                                    (7,401 )           (4 )         (6,630 )           (3 )               (771 )            (12 )
Amortization                                    (1,367 )           (1 )           (588 )            -                 (779 )           (132 )
Restructuring, integration and asset
impairment charges                              (6,585 )           (4 )         (2,555 )           (1 )             (4,030 )           (158 )
Interest expense                                  (867 )           (1 )         (2,283 )           (1 )              1,416               62
Other income, net                                  743              -              766              -                  (23 )             (3 )

(Loss) income from continuing operations
before income taxes                             (2,527 )           (2 )          1,352              1               (3,879 )           (287 )
Income tax benefit (expense)                       659              -              (64 )            -                  723            1,130

(Loss) income from continuing operations        (1,868 )           (1 )          1,288              1               (3,156 )           (245 )
Loss from discontinued operations                  (92 )            -             (578 )            -                  486               84

Net (loss) income                           $   (1,960 )           (1 )%    $      710              1 %    $        (2,670 )           (376 )%

Revenue

Total revenue decreased $39,662, or 19%, to $169,105 for the three months ended March 31, 2009 as compared to the same period in 2008. The decline in revenue is primarily attributed to a significant decrease in capital markets revenue as compared to the same period in 2008 resulting from the continued weakness in overall capital markets activity. Overall capital markets activity during the first quarter of 2009 reflects reduced levels of IPO and M&A transactions as compared to the same period in 2008. During the three months ended March 31, 2009 there were only two market-wide priced IPOs as compared to 26 transactions occurring during the same period in 2008. During the first quarter of 2009 there were 25 market-wide M&A transactions as compared to 32 during the same period in 2008. As such, revenue from capital markets decreased $24,743, or 49%, during the three months ended March 31, 2009 as compared to the same period in 2008. The Company's transactional revenue from capital markets activity for the first quarter of 2009 ($22,681) was at its lowest quarterly level since the mid 1990's. Included in capital markets revenue for the three months ended March 31, 2009 is $2,890 of revenue related to the Company's VDR services, which decreased slightly as compared to the same period in 2008 as a result of the overall decline in IPO and M&A activity.

Shareholder reporting services revenue decreased $11,314, or 11%, to $94,233 for the three months ended March 31, 2009 as compared to the same period in 2008. Compliance reporting revenue decreased approximately 15% for the three months ended March 31, 2009 as compared to the same period in 2008. The decrease in revenue from compliance reporting services was primarily attributable to
(i) fewer filings; (ii) non-recurring jobs in 2008; (iii) competitive pricing pressure; and (iv) lower print volumes from existing customers. During the three months ended March 31, 2009 the number of Form 10-Ks that were filed industry-wide decreased by approximately 1,400 filings, or approximately 16% as compared to the same period in 2008. The decline in the number of filings in 2009 was primarily related to: (i) the significant decline in filings related to asset-backed securities; (ii) overall consolidation of public companies; and
(iii) fewer companies going public during these current economic conditions. Investment management revenue decreased approximately 5% for the three months ended March 31, 2009 as compared to the same period in 2008, primarily resulting from (i) lower revenue due to competitive pricing pressure; (ii) non-recurring work in 2008; and (iii) the timing of certain jobs in 2009. These declines were partially offset by the addition of new clients and increases in print volumes for certain existing customers in 2009. Translation services revenue decreased 16% for the three months ended March 31, 2009 as compared to the same period in 2008, primarily a result of competitive pricing pressure and less activity in 2009.

Marketing communications services revenue decreased $1,711, or 4%, during the three months ended March 31, 2009 as compared to the same period in 2008, primarily due to a decline in revenue generated by the loss of certain accounts during 2008 in connection with the transition of acquired businesses, which had an adverse impact on the results for the three months ended March 31, 2009 as compared to the same period in 2008 and lower activity levels and volumes from existing customers, as companies reduced marketing spending in the current economic downturn. The decrease in marketing communications services revenue is partially offset by the addition of revenue from the acquisition of RSG, which was acquired in April 2008.

Commercial printing and other revenue decreased approximately 20% for the three months ended March 31, 2009 as compared to the same period in 2008, primarily due to lower volumes and activity levels as a result of the current economic conditions, and competitive pricing pressure in 2009.

                                                     Three Months Ended March 31,                         Quarter Over Quarter
                                                         % of                          % of             Favorable/(Unfavorable)
Revenue by Geography:                     2009          Revenue         2008          Revenue           $ Change           % Change
                                                                           (Dollars in thousands)

Domestic (United States)                $ 145,216             86 %    $ 170,399             82 %    $        (25,182 )           (15 )%
International                              23,889             14         38,368             18               (14,479 )           (38 )

Total revenue                           $ 169,105            100 %    $ 208,767            100 %    $        (39,662 )           (19 )%

Revenue from the domestic market decreased 15% to $145,216 for the three months ended March 31, 2009, compared to $170,399 for the three months ended March 31, 2008. This decrease is primarily due to the reduction in capital markets and shareholder reporting services revenue as discussed above.

Revenue from the international markets decreased 38% to $23,889 for the three months ended March 31, 2009, as compared to $38,368 for the three months ended March 31, 2008. The decline in revenue from international markets primarily reflects a reduction in international capital markets activity in 2009 and the aforementioned decline in overall shareholder reporting services revenue. Also contributing to the decrease in revenue from international markets was the improvement in the U.S. dollar during the three months ended March 31, 2009 as compared to the same period in 2008. At constant exchange rates, revenue from the international markets decreased $8,921, or 23%, for the three months ended March 31, 2009 as compared to the three months ended March 31, 2008.

Cost of Revenue

Cost of revenue decreased $28,093, or 20%, for the three months ended March 31, 2009 as compared to the same period in 2008. The decrease in cost of revenue was primarily due to the significant decline in total revenue, as previously discussed. As a percentage of revenue, cost of revenue decreased to 65% for the three months ended March 31, 2009 as compared to 66% for the same period in 2008. Historically capital markets services revenue has been the Company's most profitable class of service. Although the percentage of revenue derived from transactional activity in the capital markets decreased significantly during the three months ended March 31, 2009, the Company's cost of revenue as a percentage of revenue decreased as compared to the same period in 2008, a direct result of the Company's cost savings measures and more efficient operating model. Also contributing to the decrease in the cost of revenue as a percentage of revenue are the positive synergies realized from the Company's recent acquisitions, as the Company realizes the benefit of the integration and consolidation of the acquired companies' operations into Bowne's existing operations.

Selling and Administrative Expenses

Selling and administrative expenses decreased $11,877, or 20%, for the three months ended March 31, 2009 as compared to the same period in 2008. The decrease is primarily due to decreases in payroll, incentive compensation and expenses directly associated with sales, such as commissions, and is also due to the favorable impact of the Company's recent cost savings measures, including savings resulting from the Company's headcount reductions that occurred during the past twelve months, the suspension of the Company's matching contribution to the 401(k) Savings Plan for the 2009 plan year and the Company's reduction in travel and entertainment spending. Also contributing to the decrease in selling and administrative expenses was a decrease in compensation expense recognized under the Company's equity incentive plans. During the three months ended March 31, 2008 the Company recognized costs of approximately $1.1 million under the Company's Long-Term Equity Incentive Plan that was settled in March 2008. There were no such payments in 2009 under the Company's 2008 Equity Incentive Plan, which is discussed in more detail in Note 17 to the Consolidated Financial Statements in the Company's annual report on Form 10-K for the year ended December 31, 2008. Offsetting the decrease in equity-based compensation for the three months ended March 31, 2009 as compared to the same period in 2008 was a $457 increase in compensation expense recognized for stock options as a result of the voluntary surrender and cancellation of a portion of the Company's stock options held by certain officers during the first quarter of 2009, which is discussed further in Note 4 to the Condensed Consolidated Financial Statements. Partially offsetting the decrease in selling and administrative expenses was an increase in bad debt expense for the three months ended March 31, 2009 of approximately $0.5 million as compared to the same period in 2008, primarily a result of the current economic conditions, and an increase in pension costs of approximately $1.2 million as compared to the prior year. As a percentage of revenue, overall selling and administrative expenses improved to 27% for the three months ended March 31, 2009 as compared to 28% for the same period in 2008.

Other Factors Affecting Net Income

Depreciation and amortization expense increased for the three months ended March 31, 2009 as compared to the same period in 2008, primarily due to depreciation and amortization expense recognized in 2009 related to the Company's recent acquisitions which are discussed in more detail in Note 2 to the Consolidated Financial Statements in the Company's annual report on Form 10-K for the year ended December 31, 2008. The increase in depreciation expense was partially offset by decreases in depreciation expense recognized for the three months ended March 31, 2008 for facilities that were subsequently closed in connection with the consolidation of the Company's manufacturing platform.

Restructuring, integration and asset impairment charges for the three months ended March 31, 2009 were $6,585 as compared to $2,555 for the same period in 2008. The charges incurred during the three months ended March 31, 2009 primarily represent costs related to the Company's headcount reductions and facility consolidations, as previously discussed, and integration costs of approximately $1.1 million primarily related to the Company's recent acquisitions. The charges incurred during the three months ended March 31, 2008 primarily consisted of: (i) integration costs primarily related to the acquisition of Alliance Data Mail Services; (ii) costs associated with the consolidation of the Company's digital print facility in Milwaukee, WI with its existing facility in South Bend, IN; and (iii) additional workforce reductions.

Interest expense decreased $1,416, or 62%, for the three months ended March 31, 2009 as compared to the same period in 2008, primarily due to a decrease in interest expense on the Company's convertible debt, as a result of the redemption and repurchase of approximately $66.7 million of the Notes in October 2008, as discussed in more detail in Note 11 to the Consolidated Financial Statements in the Company's annual report on Form 10-K for the year ended December 31, 2008. Interest expense for the first quarter of 2009 consisted primarily of interest on the Company's borrowings under its credit facility, which had significantly lower interest rates than the Company's $75.0 million 5.0% convertible debt that was outstanding during the first quarter of 2008. The weighted-average interest rate on the Company's borrowings under its credit facility was approximately 2.08% during the three months ended March 31, 2009.

Income tax benefit for the three months ended March 31, 2009 was $659 on pre-tax loss from continuing operations of ($2,527) compared to income tax expense of $64 on pre-tax income from continuing operations of $1,352 for the same period in 2008. Income tax expense for the three months ended March 31, 2008 included a net tax benefit of $497 resulting from the recognition of previously unrecognized tax benefits and tax benefits associated with the finalization of the Company's 2006 state income tax returns.

The loss from discontinued operations for the three months ended March 31, 2009 was $92 as compared to $578 for the same period in 2008. The results from discontinued operations primarily reflect adjustments related to the estimated indemnification liabilities associated with the Company's discontinued businesses, interest expense related to the deferred rent associated with leased facilities formerly occupied by discontinued businesses and income tax expense associated with the discontinued businesses.

As a result of the foregoing, net loss for the three months ended March 31, 2009 was ($1,960) as compared to net income of $710 for the three months ended March 31, 2008.

Domestic Versus International Results of Operations

The Company has operations in the United States, Canada, Europe, Central
America, South America and Asia. Domestic and international components of (loss)
income from continuing operations before income taxes for the three months ended
March 31, 2009 and 2008 are as follows:


                                                             Three Months Ended
                                                                  March 31,
                                                              2009          2008

   Domestic (United States)                                $   (1,588 )   $  3,483
   International                                                 (939 )     (2,131 )
. . .