Wednesday, June 15, 2005

Merrill Corporation Announces Increased Revenues in First Quarter
Merrill Corporation announces increased revenues for the fiscal first quarter ending April 30, 2005, compared to the first quarter of last year.

St. Paul, Minn. - Merrill Corporation (www.merrillcorp.com ), a global, diversified communications and document services provider, today announced increased revenues for the fiscal first quarter ending April 30, 2005, compared to the first quarter of last year. Revenue for the quarter increased 9 percent to $207 million with approximately half of the increase attributed to three recent acquisitions.

Net income for the fiscal quarter ending April 30, 2005 was $27.3 million, an increase of $16.1 million from the same period in the prior fiscal year. $18.6 million of fiscal first quarter net income was the result of the cumulative effect of a change in accounting principle, the adoption of SFAS 150 (relating to redeemable preferred stock). Excluding this item, net income decreased $2.5 million in the first quarter of fiscal year 2006 compared to the same quarter in fiscal 2005.

“We are satisfied with our first quarter revenue and earnings given the impact of reduced capital markets activity on our financial transaction business,” said John Castro, CEO of Merrill Corporation. “Acquisitions completed in the second half of last year and the first quarter of this year fueled the growth of our diversified businesses and helped offset the fact that this is in an off-year for election ballot printing.”

“We achieved solid revenue growth in all of our business units,” said Castro. “Revenue was particularly strong in Realty Marketing Services, Financial Services and Document Management Services.”

Earnings before interest expense, taxes, depreciation and amortization and other non-cash adjustments (EBITDA) for the fiscal quarter ending April 30, 2005, was $29.5 million, representing a 5 percent decrease from $31.0 million in the prior year’s fiscal first quarter.

EBITDA is a non-GAAP (Generally Accepted Accounting Principles) financial measure that is commonly used to assist investors in the understanding of operating results. Also, certain of the Corporation’s debt agreements are based on calculations of EBITDA. As such, EBITDA is of great interest to the Corporation’s lenders and investors as a key performance measure. The following is a table reconciling GAAP net income to EBITDA:

Reconciliation of net income to EBITDA

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Forward-Looking Statements
Merrill Corporation cautions investors that certain statements contained in this press release that state management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. Management wishes to caution the reader these forward-looking statements are not historical facts and are only estimates or predictions. Actual results may differ materially from those projected as a result of risks and uncertainties including, but not limited to, the competitive environment in our business, demand for our product and service offerings, projections of future sales, changes in technology, our ability to retain employees and other risks. Forward-looking statements can be identified through the use of words such as “may,” “will,” “intend,” “plan,” “expect,” “anticipate,” “could,” “should,” “would,” “believe,” “estimate,” “contemplate,” “potential,” “continue,” “possible” and “proposed.”

The information contained in our news releases speaks only as of the date of such releases and we are under no obligation to update or remove such information other than as required by applicable law or regulation.