Big Flower Announces Record Results.

NEW YORK--(BUSINESS WIRE)--February 18, 1997--Big Flower Press Holdings, Inc. (NYSE: BGF), a leading advertising and marketing services company, reported fourth quarter 1996 adjusted net income of $10.3 million, or 55 cents per share, compared with adjusted net income of $8.3 million, or 45 cents per share, for the same quarter a year ago. The adjusted net income excludes non-operational charges related to the fourth quarter.

"In the fourth quarter, we achieved record results and completed five strategically important acquisitions including three in the high-growth premedia sector. The quarter s strong results reflect the company-wide benefits of our acquisition program. In addition to this favorable performance, our Webcraft subsidiary divested its lottery business enabling it to concentrate on its core business of customized direct mail," said Edward T. Reilly, President of Big Flower. "As we continue to implement our strategy of transforming Big Flower from an `ink-on-paper' focused company to a high-growth, advertising-solutions provider, we will be in a stronger position to offer increased value to our customers and our shareholders."

Sales

Net sales increased to $357.6 million in the fourth quarter from $298.9 million in the same period last year, a gain of 20%. For the full year ended December 31, 1996, net sales rose approximately 20% to $1.2 billion from $998 million during the same period for 1995. Year-over-year sales growth, largely a result of new business derived through acquisitions, more than offset the revenue impact of recent reductions in paper prices.

Operating Income

Operating income increased to $29.0 million in the fourth quarter from $22.8 million in the same period last year, a gain of 27%. For the full year ended December 31, 1996, operating income rose approximately 9% to $69.3 million from $63.6 million during the same period for 1995. Operating income improved due to revenue growth and higher margins.

EBITDA

Operating income plus depreciation, amortization and merger costs (EBITDA) increased to $45.2 million in the fourth quarter from $32.0 million in the same period in 1995, a gain of 41%. For the 12 months of fiscal year 1996, EBITDA grew to $122.6 million from $103.5 million in the same period in 1995, a gain of 18%. "EBITDA increased as a result of acquisitions, margin improvement and tight expense controls, while allowing for significant operating expense investments in our company s infrastructure, marketing programs and other projects to support our future growth," said Mr. Reilly.

Net Income

Both the 1995 and 1996 results of operations have been restated in connection with the Scanforms merger effective October 4, 1996 which was accounted for on a pooling of interests basis.

Actual net loss for the fourth quarter was $4.6 million, or 26 cents per share, compared with a loss of $17.3 million or $1.14 per share in the same quarter of the prior year. For the 12 month period ended December 31, 1996, the actual net loss was $5.4 million, or 29 cents per share, compared with a loss of $18.1 million, or $1.37 per share, for the year ended December 31, 1995.

Adjusted net income rose to $10.3 million, or 55 cents per share, for the fourth quarter 1996 from adjusted net income of $8.3 million, or 45 cents per share, for the same period in 1995. The 1996 fourth quarter adjusted results exclude (i) approximately $2.7 million of non-recurring compensation expenses related to the acquisitions of Designer Color Systems and Digital Dimensions, (ii) $.9 million of expenses related to the merger of Scanforms, (iii) a $14.3 million loss related to the sale of Webcraft Games and (iv) $.2 million of expenses subsequent to the acquisition of Printco. The 1995 adjusted results (i) assume that the IPO and a concurrent refinancing of certain high-cost debt had occurred at the beginning of the relevant period and (ii) exclude charges of $1.6 million in connection with a plant closing and $3.7 million in connection with the TC Advertising administrative office relocation from California to Maryland and costs associated with terminating interest rate swap agreements, prepayment of debt and redemption of preferred stock.

For fiscal year 1996, adjusted net income was $14.4 million, or 78 cents per share, compared with adjusted net income of $15.9 million, or 88 cents per share, for the same period 1995. The 1996 adjusted results exclude (i) approximately $2.7 million of non-recurring compensation expenses related to the acquisitions of Designer Color Systems and Digital Dimensions, (ii) $1.5 million of merger expenses related to the acquisition of Scanforms, (iii) a $14.3 million loss related to the sale of Webcraft Games, (iv) $5.2 million of non-recurring charges related to the acquisition of Webcraft Technologies, and (v) $2.1 million of expenses subsequent to the acquisitions of Webcraft and Printco. The 1995 adjusted results (i) assume that the IPO and a concurrent refinancing of certain high-cost debt had occurred at the beginning of the period and (ii) exclude charges of $5.4 million in connection with the TC Advertising administrative office relocation from California to Maryland and $1.6 million in connection with a plant closing and costs associated with terminating interest rate swap agreements, prepayment of debt and redemption of preferred stock.

Big Flower is a leading advertising and marketing services company with expertise in advertising insert programs, circulation-building newspaper products, outsourced digital premedia and content management services, specialized direct mail products, commercial games and fragrance samplers. -0-

                     Big Flower Press Holdings, Inc.
                  Consolidated Statement of Operations
                  (In Thousands, Except Per Share Data)

                                Three Months Ended Dec. 31, (a)
                              1996      1996        1995      1995
                              Actual    Adjusted    Actual    Adjusted

Net sales                   $ 357,574  $ 357,574  $ 298,852  $ 298,852
Operating expenses:
 Cost of production           277,356    277,356    250,531    250,531
 Selling, general and
  administrative               35,013     32,267 (b) 16,352     16,352
 Depreciation                  10,565     10,565      5,369      5,369
 Amortization of
  intangibles                   4,674      4,674      3,802      3,802
 Merger costs                     944            (b)
                              328,552    324,862    276,054    276,054

Operating income               29,022     32,712     22,798     22,798
Other expenses (income):
 Interest expense              10,241     10,241     10,261      8,216 (c)
 Interest income                 (135)      (135)      (410)           (c)
 Loss on sale of WGI           14,277            (b)
 Other expense, net             2,610      2,610      5,665        365 (c)
 Preferred dividends
  of subsidiary                                         451            (c)
                               26,993     12,716     15,967      8,581

Income before income
 tax expense                    2,029     19,996      6,831     14,217
Income tax expense              6,482      9,737 (b)  3,175      5,949 (c)
Income (loss) before
 extraordinary item            (4,453)    10,259      3,656      8,268
Extraordinary item, net           186            (b) 19,248            (c)
Net income (loss)           $  (4,639)  $ 10,259   $(15,592)   $ 8,268
Loss on redemption of                                 1,682            (c)
 preferred stock
Net income (loss) available
 to common stockholders                            $(17,274)   $ 8,268

Income(loss) per common share
 and common share equivalent  ($0.25)      $0.55     $0.13     $0.45
  before extraordinary item
Extraordinary item - early    ($0.01)      $0.00    ($1.27)    $0.00
 extinguishment of debt
Net income (loss) per common
 share and common share
  equivalent                  ($0.26)      $0.55    ($1.14)    $0.45

Weighted average shares
 outstanding            18,184,941  18,822,397  15,129,091  18,237,787 (c)

Supplemental Information

EBITDA                 (d) $  45,205   $  47,951  $  31,969  $  31,969

NOTES TO CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS
ENDED DEC. 31, 1996

(a)  Effective Oct. 4, 1996, Scanforms, Inc. merged with Big Flower
and Big Flower issued approximately 1.6 million shares of common
stock to the shareholders of Scanforms.  The merger was accounted
for using the pooling of interests method, and all Big Flower
historical information has been restated as if the pooling occurred
at the beginning of the periods presented here.  The fourth quarter
results included $.9 million of transactions costs.  All other
acquisitions and the disposition have been included or excluded as
of their respective transaction dates.

(b)  Fourth quarter 1996 adjusted results take into consideration
the following items:
    1) On Dec. 5, 1996, the company acquired Designer Color Systems,
Ltd. and Digital Dimensions, Inc.  Approximately $2.7 million of
non-recurring compensation expense related to the acquisition was
recognized in the fourth quarter of 1996 and is excluded.
    2) Merger related expenses are excluded (see Note (a))
    3) On Dec. 23, 1996, the company completed the sale of Webcraft
Games, Inc. (WGI).  The resulting loss of $14.3 million is excluded.
    4) Income tax expense has been adjusted to reflect the company's
adjusted annual effective tax rate of approximately 50%.
    5) Subsequent to its acquisition of Printco, Inc. on Oct. 1, 1996,
the company repaid certain of Printco's outstanding debt which
generated a loss of $.2 million (net of income tax benefit of $.1
million) which is excluded.

(c) Fourth quarter 1995 adjusted results take into consideration the
following items:
    1) Effective Nov. 28, 1995, the company issued 5,500,000 shares of
common stock in an initial public offering.  Adjusted results take
into consideration the initial public offering as if it occurred on
Jan. 1, 1995.
    2) Interest expense is reduced due to lower debt levels and
interest rates in connection with a new credit agreement.
    3) Interest income earned in the fourth quarter of 1995 on
temporarily idle funds has been eliminated.
    4) Other expense, net reflects the exclusion of charges of $1.6
million in connection with a plant closing and $3.7 million in
connection with the Treasure Chest administrative office relocation
from California to Maryland.
    5) Dividends paid on the redeemable preferred stock have been
eliminated.
    6) The marginal tax rate of 40% has been applied to the adjustments
to interest expense and interest income.
    7) In connection with the initial public offering, the company
terminated certain interest rate swap agreements and repaid certain
of its debentures and existing credit agreement which generated an
extraordinary loss of $19.2 million (net of income tax benefit of
$11.3 million).
    8) In connection with the initial public offering, the company paid
a $1.7 million premium on the repurchase of the redeemable preferred
stock of a subsidiary.  The loss on redemption of such stock has
been eliminated.
    9) Actual shares outstanding is adjusted for the 2 for 1 stock
split in connection with the public offering.

(d) "EBITDA" represents operating income plus depreciation,
amortization and merger costs.


                     Big Flower Press Holdings, Inc.
                  Consolidated Statement of Operations
                  (In Thousands, Except Per Share Data)


                                Twelve Months Ended Dec. 31, (a)
                              1996       1996        1995      1995
                              Actual     Adjusted    Actual    Adjusted

Net sales                   $1,201,860  $1,201,860  $ 998,046  $ 998,046
Operating expenses:
 Cost of production            971,789     971,789    837,928    837,928
 Selling, general and
  administrative               107,483     104,737 (b) 56,616     56,616
 Depreciation                   34,756      34,756     20,826     20,826
 Amortization of
  intangibles                   17,003      17,003     19,093     19,093
 Merger costs                    1,486             (b)
                             1,132,517   1,128,285    934,463    934,463
Operating income                69,343      73,575     63,583     63,583
Other expenses (income):
 Interest expense               37,967      37,967     41,542     30,226 (c)
 Interest income                  (712)       (712)      (678)      (268)(c)
 Loss on sale of WGI            14,277             (b)
 Other expense, net             12,813       7,614 (b)  7,795        795 (c)
 Preferred dividends
  of subsidiary                                         2,346            (c)
                                64,345      44,869     51,005     30,753

Income before income
 tax expense                     4,998      28,706     12,578     32,830
Income tax expense               8,283      14,353 (b)  9,750     16,918 (c)
Income (loss) before
 extraordinary item             (3,285)     14,353      2,828     15,912
Extraordinary item, net          2,078             (b) 19,248        -   (c)
Net income (loss)             $ (5,363)   $ 14,353   $(16,420)  $ 15,912
Loss on redemption of
 preferred stock                                        1,682            (c)
Net income (loss) available
 to common stockholders       $ (5,363)   $ 14,353   $(18,102)  $ 15,912

Income (loss) per common share
 and common share equivalent
  before extraordinary item     ($0.18)     $0.78      $0.09      $0.88
Extraordinary item - early
 extinguishment of debt         ($0.11)     $0.00     ($1.46)     $0.00
Net income (loss) per common
 share and common share
  equivalent                    ($0.29)     $0.78     ($1.37)     $0.88
Weighted average shares
 outstanding              18,314,654   18,492,336  13,167,775  18,007,126 (c)

Supplemental Information

EBITDA                 (d) $ 122,588   $  125,334  $  103,502  $  103,502


NOTES TO CONSOLIDATED STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS
ENDED DEC. 31, 1996

(a)  Effective Oct. 4, 1996, Scanforms, Inc. merged with Big Flower
and Big Flower issued approximately 1.6 million shares of common
stock to the shareholders of Scanforms.  The merger was accounted
for using the pooling of interests method, and all Big Flower
historical information has been restated as if the pooling occurred
at the beginning of the periods presented here.  The 1996
results included $1.5 million of transactions costs.  All other
acquisitions and the disposition have been included or excluded as
of their respective transaction dates.

(b)  1996 adjusted results take into consideration the following
items:
    1) On Dec. 5, 1996, the company acquired Designer Color Systems,
Ltd. and Digital Dimensions, Inc.  Approximately $2.7 million of
non-recurring compensation expense related to the acquisition was
recognized in the fourth quarter of 1996 and is excluded.
    2) Merger related expenses are excluded (see Note (a))
    3) On Dec. 23, 1996, the company completed the sale of Webcraft
Games, Inc. (WGI).  The resulting loss of $14.3 million is excluded.
    4) Other expense, net reflects the exclusion of $5.2 million of
non-recurring charges related to financing transactions in
connection with the acquisition of Webcraft Technologies, Inc.
    5) Income tax expense has been adjusted to reflect the company's
adjusted annual effective tax rate of approximately 50%.
    6) Subsequent to its acquisitions of Webcraft and Printco,
Inc., the company repaid certain outstanding debt at a premium which
generated a loss of $2.1 million (net of income tax benefit of $1.4
million) which is excluded.

(c)  1995 adjusted results take into consideration the following
items:
    1) Effective Nov. 28, 1995, the company issued 5,500,000 shares of
common stock in an initial public offering.  Adjusted results take
into consideration the initial public offering as if it occurred on
Jan. 1, 1995.
    2) Interest expense is reduced due to lower debt levels and
interest rates in connection with a new credit agreement.
    3) Interest income earned in the fourth quarter of 1995 on
temporarily idle funds has been eliminated.
    4) Reflects the exclusion of charges of $1.6 million
in connection with a plant closing and $5.4 million in
connection with the Treasure Chest administrative office
relocation from California to Maryland.
    5) Dividends paid on the redeemable preferred stock have been
eliminated.
    6) The marginal tax rate of 40% has been applied to the
adjustments to interest expense and interest income.
    7) In connection with the initial public offering, the company
terminated certain interest rate swap agreements and repaid certain
of its debentures and existing credit agreement which generated an
extraordinary loss of $19.2 million (net of income tax benefit of
$11.3 million).
    8) In connection with the initial public offering, the company paid
a $1.7 million premium on the repurchase of the redeemable preferred
stock of a subsidiary.  The loss on redemption of such stock has
been eliminated.
    9) Actual shares outstanding is adjusted for the 2 for 1 stock
split in connection with the public offering.

(d) "EBITDA" represents operating income plus depreciation,
amortization and merger costs.

CONTACT: Big Flower Press

Nancy Murray

212/521-1606