Ann Levine Janaury 31, 2003 -- Banta Corporation (NYSE: BN) released fourth quarter earnings on Tuesday, January 28, 2003. For the quarter ending December 31, 2002, revenue was $348 million compared to $367 million for the same period last year, down 5.2%. Full year revenue was $1.37 billion in 2002 as compared to $1.4 billion in 2001. Diluted earnings per share were $1.71 in 2002 compared with $2.01 the prior year. 2002 results include a fourth quarter non-cash impairment charge of $26.8 million. Topics of this summary include: -2002 Performance -Restructuring -Print sector results -Book group expansion -Q1 & Q2 2003 outlook 1 - Banta reports solid performance in 2002 despite operating in one of the toughest print environments in the last 40 years. Net earnings and diluted earnings per share are above the previous year, before impairment charges. 2 - Overall, reduced promotional and advertising spending negatively impacted Banta, especially in the direct marketing and publications sectors of their business. 3 - The company is closing a consumer catalog plant in St. Paul, Minnesota, and the operations will be consolidated with an existing plant in Maple Grove, MN. The St. Paul plant is one of Banta’s oldest and least efficient in print operations, while the Maple Grove plant is modern, well equipped and highly competitive. The consolation is an effort to eliminate an inefficient operation and to create savings for the company. The company will subsequently invest and expand print capacity in the Maple Grove plant. 4 - Later, a company spokesman said the closure would result in about 300 layoffs, representing about 3.8% of Banta's worldwide work force of 8,000. Following the plant's closure, Banta will have five facilities with 1,100 workers in the Twin Cities area. The restructuring is expected to generate annual savings of $8 million to $10 million, beginning in 2004, with a "modest" benefit in the fourth quarter of this year. 5 - The restructuring will involve $15 - $18 million in pretax charges that are expected in the second and third quarters of 2003. 6 - Banta’s print sector reported lower sales and profitability in the fourth quarter due to market conditions. The company attributes the majority of the sales decline to paper price reductions, where actual manufacturing was higher that the previous time period. 7 - The company predicts that in 2003 paper prices will continue to decline which may have additional impact of profitability. 8 - Commercial print – consumer catalogs and direct marketing – both had lower sales and earnings with direct marketing significantly lower than 2001. 9 - Banta’s Book business showed a good fourth quarter with double digit increases in profitability for the year due to a strong educational market, a trend in shorter run lengths, a trend in state-specific text books, and a broad list of customers. 10 - Due to the strong book business, the company will invest $6 million in the Northern Wisconsin manufacturing facility during the second quarter of this year. 11 - Capital expenditures in 2003 are expected to be $75-90 million due to a shortage of capacity. The company expects to add additional catalog facilities. The company will also make an investment in technology by installing a new operations platform internally. 12 - Upcoming expansion opportunities in supply chain management include Asia, Eastern Europe and the U.S. particularly in the areas of medical devices, pharmaceuticals and retail. Expansion would be due to a mixture of acquisition and organic growth. 13 - Outlook for the first two quarters of 2003 should equal or slightly exceed earnings of 2002. The company expects growth in the low to mid single digits for the entire year depending upon the economy.