Tuesday, June 15, 2004

Merrill Corporation Announces Increased Earnings in First Quarter
Merrill Corporation announces a three-fold (315 percent) increase in earnings for the fiscal first quarter ended April 30, 2004, 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 a three-fold (315 percent) increase in earnings for the fiscal first quarter ended April 30, 2004, compared to the first quarter of last year. Revenue for the quarter increased 23 percent compared to the first quarter of fiscal 2004 to $189 million and net income for the fiscal quarter ended April 30, 2004, was $11.2 million, an increase of $7.7 million from the same period in the prior fiscal year. 

We are very pleased with our record first quarter revenue and earnings," said John Castro, CEO of Merrill. "We achieved both revenue and earnings increases in each of our operating business units compared to the first quarter of fiscal 2004. More robust levels of financial market activity continued during the first quarter, resulting in strong revenue growth in our Financial Document Services business. That growth, coupled with ongoing improvements in our cost structure, delivered significant profits. 

Additionally, we continue to grow our diversified business, most notably marketing and communication services to the real estate industry and document management services to the legal industry," said Castro. 
Earnings before interest expense, taxes, depreciation and amortization and other adjustments as defined in our Credit Agreement (Covenant EBITDA) for the fiscal quarter ended April 30, 2004, was $31.0 million, representing a 53 percent increase over the $20.3 million earned in the prior year's fiscal first quarter. Covenant EBITDA for the trailing 12 months ended April 30, 2004, was $78.4 million, compared to the Credit Agreement minimum requirement of $57.2 million. 

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

Reconciliation of net income to Covenant EBITDA
	Three months ended April 30,
($000s)	2004	2003
Net Income(Loss)	$11,231	$3,568
Adjustments:
Income taxes	8,712	4,372
Interest expense	8,265	8,917
Depreciation and amortization	3,543	3,760
Other	(747)	(12)
Covenant EBITDA	$31,004	$20,265

About Merrill Corporation 
Merrill Corporation (www.merrillcorp.com) is a diversified communications and document services company applying advanced information systems and intranet/Internet technology to provide a wide range of services to its financial, legal and corporate clients. Merrill's services integrate traditional composition, imaging and printing services with online document management, distribution and collaborative solutions. This integrated approach helps streamline the preparation and distribution of business-to-business communication materials. Merrill Corporation serves its domestic clients through 45 offices in 33 cities throughout the United States. Its international clients are served through the client service centers in London, Paris and Frankfurt, as well as a joint venture with Quebecor World in Canada and other affiliate relationships in Europe, Asia, Latin America and Australia. 

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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.