By Ann Levine May 1, 2003 - Banta Corporation (NYSE: BN) Menasha, WI, reported improved performance in today's earnings conference call. Sales for the first quarter were $336 million compared with $333 million for the same period in 2002. Earnings in the first quarter were $11.2 million as compared to $10.5 million for first quarter 2002. Diluted earnings per share were $0.44 for the first quarter as compared to $0.41 in 2002. Net earnings included a pre-tax structuring charge of $916,000, which is part of the company's previously announced restructuring of $15-18 million. The year 2003 marked the 26th year in a row that Banta has increased dividends year over year. First quarter sales showed a modest increase due to increased efforts in sales, a modest increase in paper prices, and a solid performance in the supply chain management sector. Sector diversity, market share gains, and cost containment efforts were also cited as the reasons for first quarter overall results. Topics of this Summary: * Print Sector Performance * Supply Chain Management Performance * 2003 Outlook * Q & A Print Sector Banta's print sector included educational book printing, publications, catalogs and direct marketing. Overall the print sector showed sales 2% below the same period last year. Highlights include: Educational Book Printing - Book printing has not been as strong as expected and there has been overall lower activity in the education market due mainly to reduced State and local budgets. Budget nervousness has caused publishers to delay orders. The second quarter is typically strong in book sales but the company expects performance to be lower than last year. Literature Management and Fulfillment - Expectations are for continued growth in this area. The company announced four major additions or expansions to spur growth: a new warehouse, acquisition of Qualipak, doubling capacity at a Minneapolis facility by moving to a new building, and a relocation of a facility near the Wisconsin headquarters. Additional marketing to new customers in the areas of healthcare, financial services, telecommunication, pharmaceuticals and retail will round out growth efforts. Publications Division - The first quarter showed an increase in revenues of 9% even in a time of lower page counts due to lower advertising spending. Banta claims a revenue increase is evidence of market share gains. In the magazine printing area, Banta will increase its sales force by approximately 10% and are aggressively seeking new revenue streams, such as article reprints and mail lists and are targeting magazines that are not as dependent on ad cycles. Catalog Division - The catalog division had an increase in revenues in the first quarter but a decline in overall earnings. Since the catalog industry is highly seasonal, Banta is targeting customers that print on a consistent schedule. The company is also offering new services in pre-media and has introduced Banta Tracks, a product that tracks a catalog from the shipping dock to the consumer's mailbox. Direct Marketing - Direct marketing proved challenging sector of business. Print activity or the number of impressions are up slightly over quarter one 2002 and Banta is experiencing new account activity and the number of bookings picking up. Supply Chain Management The first quarter was strong with an 11% growth in sales over the first quarter in 2002. Although Supply Chain Management showed strong profitability, Banta plans to grow this sector of the business through applying the company's expertise across industries and geographic expansion. Other industries include electronic games, cell phones and medical devices. Geographic expansion includes additional locations in North America, Asia and Europe. Specific targets in an Asian expansion include Mainland China and Taiwan. Health Care Health Care - Revenues for the first quarter were lower by 4% compared to last year. This is the result of a sluggish market and lower prices on foreign sourced products. The outlook for health care is modest growth with the introduction of new products and continued cost containment. 2003 Outlook Banta expects 2003 performance to show $2.36 to $2.48 earnings per diluted share before restructuring charges. Q & A 1. Although there has been an announcement that paper prices have increased 3-4% as of April 1st, 2003, Banta's paper purchases from first quarter 2002 to first quarter 2003 remained basically comparable with a 1% increase. The price increase is currently working its way through the market. 2. Expectations for Supply Chain Management margins are expected to be 5.5%-6.0% even though the margins have been higher. The company hopes to enjoy higher margins in the future but it depends on the product mix and business changes. 3. The largest impact of the restructuring charges, although dependent on when the activity occurs, is expected in the second quarter 2003. 4. Supply Chain Management growth is primarily from existing customers. New business was booked in fourth quarter 2002 and first quarter 2003 but this hasn't shown up yet in the financials. This growth is from customers who are market leaders and Banta is enjoying the activity from their increased business in the marketplace. 5. Growth in the Supply Chain Management sector will be both vertical as well as through acquisition. Vertically, Banta will target other industries such as cell phones and electronic games. Banta also already started to grow organically and has recently opened a plant in Hungary. ------------------------------------------------------------------------