By Trevor Shackelford November 8, 2006 -- Banta Corp. (NYSE: BN) recently reported 2006 third quarter revenue of $382 million, comparable to the $381 million reported in the same period last year. Net earnings declined to $15.9 million from the prior year's record $21.7 million, primarily due to restructuring and asset impairment charges, and reduced pricing in both the company's printing and supply-chain management sectors. Excluding the special charges, net earnings were $20.4 million. Third quarter diluted earnings per share were 65 cents compared with 89 cents in the same period last year. Excluding the special charges, diluted earnings per share were 83 cents. Third quarter average shares outstanding were comparable in 2006 and 2005. Contents of this Summary • Quarter Highlights • Segment Performance • Guidance • Raine Radar • Q & A Quarter Highlights • SG&A expense in the third quarter was $55.2 million compared to $56 million in the year ago quarter. • As previously announced, Banta expects full-year restructuring and asset impairment pretax charges to total $9 million in 2006, and $19 million in 2007. • For 2006's first nine months, revenue was $1.13 billion, comparable to the same period last year. Earnings from continuing operations were $45.7 million ($1.87 per diluted share) compared with 2005's $49.4 million ($1.98 per diluted share). • As previously disclosed in September, the Banta Board of Directors has declared a special cash dividend of $16.00 per share, for shareholders of record on November 10, 2006. Due to the size of the special cash dividend, the New York Stock Exchange has determined that the ex-dividend date will be November 22, 2006, the business day following the dividend's payment date of November 21, 2006. • Pretax stock-based compensation expense for the first nine months of the year totaled $5.5 million (14 cents per diluted share). Earnings were positively impacted by the second quarter reversal of a tax contingency reserve of $3.7 million (15 cents per diluted share) and by this year's third quarter retiree benefit plan amendment. Segment Performance Print Segment The segment reported revenue of $271 million, compared with last year's $284 million. Operating earnings were $23.9 million, compared with the prior year's $26.2 million. The segment’s publishing and catalog solutions division reported improved third quarter revenue in trade books and business-to-business catalogs. As expected, educational print results were below those in the strong third quarter last year, which benefited from a more active state educational adoption schedule. The segment’s direct marketing solutions division, reported solid activity in personalized direct mail products, and strong growth in promotional kit assembly and fulfillment services for its growing base of healthcare providers. Supply Chain Management Segment The segment reported third quarter revenue of $111 million, a 14 percent increase compared with the prior year's $97 million. Operating earnings declined to $10.3 million, compared with $11.1 million reported in the third quarter of 2005. While strong growth in the medical device segment and additional opportunities to serve retail customers boosted revenue for the quarter, continued erosion in product content and pricing pressures reduced profitability. Guidance Management is not offering any guidance for the fourth quarter but has updated its previous 2006 guidance. Full-year revenue from continuing operations is now expected to be in the range of $1.50 billion to $1.58 billion. Diluted earnings per share from continuing operations, excluding any charges or benefits from the reorganization, are now expected to be in the range of $2.75 to $2.85, which excludes the 15 cent per share benefit from the effect of the tax reserve reversal, and $2.90 to $3.00 including the benefit. Raine Radar Since this release (11/1/06), RR Donnelley has agreed to acquire Banta for $1.3B. This agreement comes after Cenveo retracted its own bid to acquire the company. The acquisition is the latest in a string of purchases for Donnelley, which has been broadening its services, as well as its geographic reach. The deal should strengthen Donnelley’s own services, particularly in the areas of supply chain management and customized/one-to-one print. Q & A 1. Banta’s Chairman and CEO, Stephanie Streeter, would not comment on whether the Company would respect shareholder wishes if a tender was offered from Cenveo. 2. Banta identified the facilities that it previously announced would be closed or sold as part of its strategic initiatives designed to reduce costs, drive operating efficiencies and position the company for continued growth. The first phase of the initiatives, which consolidated Banta's five print divisions into a two-division structure, was announced July 25. The second phase, announced Sept. 14, projected annual savings of $35 million and revealed five locations would be impacted. 3. Streeter said her time is being spent on looking at strategic alliances that will benefit the company in the following year. 4. Banta announced that its Board of Directors, in consultation with its financial and legal advisors, unanimously rejected Cenveo, Inc.'s unsolicited proposal to acquire Banta for $47 per share. The Board of Directors determined that the proposal was not in the best interests of Banta shareholders or its other constituents. 5. The company announced strategic initiatives to strengthen its business, position the company for future growth, and return additional value to shareholders. The steps announced are expected to generate annualized cost savings of $35 million when fully implemented, position Banta for global expansion in both its print and supply-chain management businesses, and deliver cash to shareholders through a special dividend. These steps are the result of a thorough review of the company's operations, financial strength and competitive conditions by management and the Board of Directors during the past several months.