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 product offerings and solutions to service 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

Total revenue declined approximately $15.2 million, or 9%, to approximately $148.8 million for the three months ended September 30, 2009 as compared to the same period in 2008, and declined approximately $102.9 million, or 17%, to approximately $506.8 million for the nine months ended September 30, 2009, as compared to the same period in 2008. Revenue from capital markets services, which historically has been the Company's most profitable service offering, improved by approximately $1.7 million, or 4%, for the three months ended September 30, 2009 as compared to the same period in 2008, primarily due to an increase in the number of initial public offerings ("IPOs") transactions that occurred during the third quarter of 2009 in the U.S and Asia, as compared to the same period in 2008. For the nine months ended September 30, 2009, revenue from capital markets services decreased approximately $56.4 million, or 36%, as compared to the same period in 2008, primarily due to reduced levels of IPOs and merger and acquisition ("M&A") transactions, particularly in the international markets. Much of the decline in capital markets services for the nine months ended September 30, 2009 is from our international markets, which were down $37.0 million, or 62%, as compared to the prior year period, while capital markets services revenue from the U.S. was down $19.4 million, or 20%. Overall market-wide activity levels improved during the third quarter of 2009 particularly in the U.S. and Asia. However the size of the deals (as measured by total dollars) has been lower than prior periods. Although there is much uncertainty regarding the rebound of capital markets activity, the Company continues to be optimistic that IPO and M&A activity levels will be stronger for the remainder of 2009 and 2010 based on recent trends and current economic projections.

Revenue from shareholder reporting services and marketing communications decreased approximately 10% and 19%, respectively, for the three months ended September 30, 2009 and 8% and 13%, respectively, for the nine months ended September 30, 2009, as compared to the same periods in 2008. Diluted loss per share from continuing operations was ($0.21) for the three months ended September 30, 2009 as compared to diluted loss per share of ($0.62) for the same period in 2008, and diluted loss per share was ($0.43) for the nine months ended September 30, 2009, as compared to diluted loss per share of ($0.52) for the same period in 2008.

In August 2009, the Company completed a public equity offering of 12.1 million shares of its common stock, at an offering price of $5.96 per share. The net proceeds from the equity offering were approximately $67.8 million, which is net of issuance costs of $4.1 million. The net proceeds from the equity offering were used to repay the Company's term loans in their entirety, and to repay a portion of the Company's borrowings under its revolving credit facility.

In March 2009, the Company amended its $150.0 million credit facility and extended its maturity to May 31, 2011. The amended facility was restructured as an asset-based loan consisting of term loans of $27.0 million (which have been repaid in their entirety using the proceeds from the aforementioned equity offering) and a revolving credit facility of $123.0 million. In October 2009, the $123.0 million revolving credit facility was amended and extended through May 2013. The amended credit facility provides the Company with flexibility to manage through the current economic environment and is discussed in more detail in Note 14 to the Condensed Consolidated Financial Statements. As of September 30, 2009, the Company had $25.0 million outstanding under its credit facility.

In January 2009, the Company 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 estimates that the action taken during the first quarter of 2009 will result in annualized cost savings of approximately $13.0 million, of which $12.5 million will be recognized in 2009.

During the second quarter of 2009, the Company 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 were in addition to the cost savings initiatives taken during the past several years and the first quarter of 2009 and included the elimination of a total of approximately 250 positions, or approximately 8% of the Company's total headcount. The Company recorded approximately $5.6 million of severance related costs associated with these workforce reductions during the second quarter of 2009. In addition, during the second quarter of 2009, the Company incurred costs of approximately $1.5 million and recorded non-cash asset impairment charges of approximately $1.8 million, primarily related to the closure and reduction of leased space of certain facilities. During the third quarter of 2009, the Company incurred restructuring, integration and asset impairment charges of approximately $4.2 million primarily related to the closure of the Company's digital facility in Houston, TX and costs incurred in the closure of the Company's datacenter facilities and transition of these operations to a third-party services provider. The Company estimates that the annual savings from the actions taken during the third quarter of 2009 will be approximately $1.0 million and estimates that the cost savings related to the actions taken during the second and third quarters of 2009 that will be recognized in 2009 are approximately $11.5 million.

The Company estimates that the incremental cost savings to be achieved in 2009 as a result of the cost savings measures implemented during 2008 and the first nine months of 2009 are approximately $50.0 million to $60.0 million.

As a result of the Company's workforce reductions that occurred during the second quarter of 2009, the Company remeasured the funded status of its pension plan and recalculated the benefit obligations as of May 31, 2009. The remeasurement resulted in a $22.5 million reduction to the projected benefit liability, a $9.3 million reduction in deferred income tax assets, and a $13.2 million increase in stockholders' equity that was recorded during the second quarter of 2009. In addition, the Company recognized a curtailment gain of approximately $1.6 million as a result of the workforce reductions during the nine months ended September 30, 2009.

Items Affecting Comparability

The following table summarizes the expenses incurred for restructuring,
integration and asset impairment charges during the three and nine months ended
September 30, 2009 and 2008:


                                                       Three Months Ended             Nine Months Ended
                                                          September 30,                 September 30,
                                                       2009            2008          2009           2008

Total restructuring, integration and asset
impairment charges                                  $    4,220        $ 8,491      $  21,184      $ 28,525
After tax impact                                    $    2,472        $ 5,344      $  12,594      $ 17,827
Per share impact                                    $     0.07        $  0.19      $    0.41      $   0.62

The charges taken during the three and nine months ended September 30, 2009 primarily represent costs related to the Company's headcount reductions and facility closures, as previously discussed, and integration costs of approximately $2.0 million for the nine months ended September 30, 2009, respectively, which are related to the Company's acquisitions. These acquisitions 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 charges are included in the results of operations, which follows, as well as in Note 10 to the Condensed Consolidated Financial Statements.

Results of Operations

Three Months ended September 30, 2009 compared to Three Months ended
September 30, 2008


                                                      Three Months Ended September 30,                         Quarter Over Quarter
                                                            % of                          % of               Favorable/(Unfavorable)
                                              2009         Revenue          2008         Revenue           $ Change              % Change
                                                                                (Dollars in thousands)

Capital markets services revenue:
Transactional services                     $   41,131            28 %    $   38,760            24 %    $          2,371                   6 %
Virtual Dataroom ("VDR") services               2,942             2           3,637             2                  (695 )               (19 )

Total capital markets services revenue         44,073            30          42,397            26                 1,676                   4
Shareholder reporting services revenue:
Compliance reporting                           24,195            16          26,080            16                (1,885 )                (7 )
Investment management                          38,462            26          41,842            25                (3,380 )                (8 )
Translation services                            2,402             2           4,521             3                (2,119 )               (47 )

Total shareholder reporting services
revenue                                        65,059            44          72,443            44                (7,384 )               (10 )

Marketing communications services
revenue                                        34,260            23          42,077            26                (7,817 )               (19 )
Commercial printing and other revenue           5,371             3           7,039             4                (1,668 )               (24 )

Total revenue                                 148,763           100         163,956           100               (15,193 )                (9 )
Cost of revenue                              (100,476 )         (68 )      (121,901 )         (74 )              21,425                  18
Selling and administrative expenses           (44,497 )         (30 )       (49,401 )         (30 )               4,904                  10
Depreciation                                   (6,190 )          (4 )        (6,860 )          (4 )                 670                  10
Amortization                                   (1,366 )          (1 )        (1,659 )          (1 )                 293                  18
Restructuring, integration and asset
impairment charges                             (4,220 )          (3 )        (8,491 )          (5 )               4,271                  50
Interest expense                               (1,796 )          (1 )        (2,654 )          (2 )                 858                  32
Loss on extinguishment of debt                   (777 )          (1 )             -             -                  (777 )              (100 )
Other (expense) income, net                    (1,026 )          (1 )           926             1                (1,952 )              (211 )

Loss from continuing operations before
income taxes                                  (11,585 )          (8 )       (26,084 )         (16 )              14,499                  56
Income tax benefit                              4,163             3           8,356             5                (4,193 )               (50 )

Loss from continuing operations                (7,422 )          (5 )       (17,728 )         (11 )              10,306                  58
(Loss) income from discontinued
operations                                        (51 )           -           6,084             4                (6,135 )              (101 )

Net loss                                   $   (7,473 )          (5 )%   $  (11,644 )          (7 )%   $          4,171                  36 %

Revenue

Total revenue decreased $15,193, or 9%, to $148,763 for the three months ended September 30, 2009, as compared to the same period in 2008. Revenue from capital markets improved $1,676, or 4%, during the three months ended September 30, 2009, primarily due to the increased number of IPO transactions, particularly in the U.S. and Asia, as compared to the same period in 2008. This increase was partially offset by the reduced size of the deals (as measured by total dollars) occurring in 2009 as compared to the size of the deals that occurred in 2008, a decrease in the number of M&A transactions occurring in 2009 as compared to 2008, and increased pricing pressure in 2009. During the three months ended September 30, 2009, 18 priced IPO deals were awarded to service providers as compared to 11 deals that occurred during the same period in 2008, an increase of approximately 64% in 2009.

Bowne was awarded eight of these deals, or 44% of the priced IPO deals that were awarded during the three months ended September 30, 2009. In addition, the Company was awarded six of the eight largest M&A jobs that were awarded to service providers during the three months ended September 30, 2009. Capital markets services revenue from the U.S. markets slightly increased for the three months ended September 30, 2009 as compared to the same period in 2008 while capital markets services revenue from our international markets increased approximately $1.3 million, or 12%, for the three months ended September 30, 2009 as compared to the same period in 2008. The increase in revenue from our international markets is primarily due to an increase in revenue of approximately $4.1 million from our Asian subsidiaries as the Asian markets show signs of recovery. Offsetting the increase in capital markets services revenue from Asia are the reduced activity levels in Canada and Europe in 2009 as compared to 2008. In addition, capital markets services revenue is also negatively impacted by approximately $0.5 million as a result of the improvement in the U.S. dollar during the three months ended September 30, 2009 as compared to the same period in 2008. Included in capital markets revenue for the three months ended September 30, 2009 is $2,942 of revenue related to the Company's VDR services, which decreased 19% as compared to the same period in 2008 as a result of the overall decline in M&A activity.

Shareholder reporting services revenue decreased $7,384, or 10%, to $65,059 for the three months ended September 30, 2009 as compared to the same period in 2008. Compliance reporting revenue decreased approximately 7% for the three months ended September 30, 2009 as compared to the same period in 2008. The decrease in revenue from compliance reporting services was primarily attributable to: (i) fewer public filings; (ii) non-recurring jobs in 2008;
(iii) competitive pricing pressure; and (iv) lower print volumes from existing customers. 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 given current economic conditions. Investment management revenue decreased 8% for the three months ended September 30, 2009 as compared to the same period in 2008, primarily due to competitive pricing pressure in 2009 as a result of the current economic conditions, reduced print volumes and non-recurring work in 2008. Translation services revenue decreased 47% for the three months ended September 30, 2009 as compared to the same period in 2008, primarily a result of competitive pricing pressure and less activity in 2009. In addition, revenue from shareholder reporting services from the Company's international markets (primarily Canada) was also negatively impacted by approximately $0.9 million as a result of the improvement in the U.S. dollar compared to certain foreign currencies during the three months ended September 30, 2009 as compared to the same period in 2008.

Marketing communications services revenue decreased $7,817, or 19%, during the three months ended September 30, 2009 as compared to the same period in 2008, primarily due to the loss of certain accounts and lower activity levels and volumes from existing customers, as companies reduced marketing spending in the current economic downturn.

Commercial printing and other revenue decreased approximately $1.7 million for the three months ended September 30, 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.

                                                    Three Months Ended September 30,                        Quarter Over Quarter
                                                            % of                        % of              Favorable/(Unfavorable)
Revenue by Geography:                        2009          Revenue        2008         Revenue          $ Change              % Change
                                                                              (Dollars in thousands)

Domestic (United States)                  $   120,561            81 %   $ 132,447            81 %   $        (11,886 )                (9 )%
International                                  28,202            19        31,509            19               (3,307 )               (10 )

Total revenue                             $   148,763           100 %   $ 163,956           100 %   $        (15,193 )                (9 )%

Revenue from the domestic market decreased 9% to $120,561 for the three months ended September 30, 2009, compared to $132,447 for the three months ended September 30, 2008. This decrease is primarily due to the reduction in total revenue, as discussed further above.

Revenue from the international markets decreased 10% to $28,202 for the three months ended September 30, 2009, as compared to $31,509, for the three months ended September 30, 2008. Offsetting the overall decrease in revenue from international markets was an increase in revenue of approximately $4.5 million from the Company's subsidiaries in Asia, as previously discussed. The overall decline in revenue from international markets primarily reflects a reduction in capital markets activity in Canada and Europe in 2009 and a decline in revenue from shareholder reporting services from international markets, particularly in Canada, in 2009 as compared to the same period in 2008. Also contributing to the decrease in revenue from international markets was the improvement in the U.S. dollar during the three months ended September 30, 2009 as compared to the same period in 2008. At constant exchange rates, revenue from the international markets decreased $1,716, or 5%, for the three months ended September 30, 2009 as compared to the three months ended September 30, 2008.

Cost of Revenue

Cost of revenue declined by $21,425, or 18%, for the three months ended September 30, 2009 as compared to the same period in 2008. The decrease in cost of revenue was due to the decline in total revenue, as previously discussed. As a percentage of revenue, cost of revenue improved to 68% for the three months ended September 30, 2009, as compared to 74% for the same period in 2008. The improvement in cost of revenue as a percentage of revenue for the three months ended September 30, 2009 is primarily due to: (i) the improvement in operating efficiencies resulting from the Company's recent cost savings measures; (ii) the increase in capital markets services revenue, which has been the Company's most profitable class of services; and (iii) the favorable impact of approximately $2.9 million as a result of the Company updating its inventory standards during the third quarter of 2009 to reflect the Company's current cost structure and production capacity. Management will continue to update its inventory standards on a periodic basis going forward.

Selling and Administrative Expenses

Selling and administrative expenses decreased $4,904, or 10%, for the three months ended September 30, 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 and facility 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. Offsetting the decrease in selling and administrative expenses were higher medical benefit costs in 2009 as compared to the prior year and an increase in bad debt expense for the three months ended September 30, 2009 as compared to the same period in 2008. As a percentage of revenue, overall selling and administrative expenses was 30% for both periods.

Other Factors Affecting Net Income

Depreciation expense decreased approximately 10% for the three months ended September 30, 2009, as compared to the same period in 2008, resulting from the reduced level of depreciation due to facilities that were closed in connection with the consolidation of the Company's manufacturing platform and the reorganization that has occurred over the past twelve months.

Amortization expense decreased slightly for the three months ended September 30, 2009 as compared to the same period in 2008, primarily due to lower amortization expense recognized in 2009 related to the acquisition of GCom2 Solutions, Inc., ("GCom") as a result of the finalization of the purchase price allocation for this acquisition during the fourth quarter of 2008. This acquisition is 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.

Restructuring, integration and asset impairment charges for the three months ended September 30, 2009 were $4,220 as compared to $8,491 for the same period in 2008. The charges incurred during the three months ended September 30, 2009 primarily related to the closure of the Company's digital facility in Houston, . . .