MENASHA, Wis., Oct. 30 - Despite a challenging economic environment, Banta Corporation today reported quarterly results that were nearly equal to last year's record-setting third quarter. Diluted earnings per share for 2001's third quarter were 75 cents compared with last year's 78 cents. Net earnings were $18.7 million versus 2000's $19.2 million. Third quarter sales were $377 million compared with last year's $417 million. Results for the first nine months of 2001 were comparable to the same period last year, which established records for virtually all financial measures. Diluted earnings per share reached $1.67, equal to the first nine months of 2000, before a one-time charge taken during this year's first quarter. Net earnings for 2001's first nine months were $41.4 million versus $41.8 million in 2000, before the one-time charge. Sales for the first three quarters of the year reached $1.09 billion, nearly equal to 2000's $1.12 billion. Chairman Donald D. Belcher noted that net earnings for the third quarter were only 3 percent below last year's all-time high. While sales decreased 10 percent for the quarter, affected by the softer economy, nearly half of the reduction was due to a decline in paper prices. "Our manufacturing operations performed well during the third quarter, maintaining solid operating margins on lower revenue,'' says Belcher. "We continued our high level of performance by taking major steps earlier this year to reduce costs and expenses at the first signs of economic softness. Our operations instituted stringent cost controls, reduced expenses and maximized efficiencies by balancing facility staffing with plant utilization requirements. From a corporate standpoint, we used our strong cash flow to pay down debt, while cutting discretionary spending and reducing capital expenditures by one-third -- all without sacrificing future growth. These preemptive actions significantly benefited our third-quarter performance and they will help strengthen our results in the fourth quarter and beyond.'' Operational highlights for the third quarter include the following: * Direct marketing continues to benefit from growing demand for Banta's on-press personalization capabilities, with especially strong activity in the financial services sector. * Consumer catalogs experienced a favorable third quarter with volumes ahead of last year and improved manufacturing efficiencies, although a competitive pricing environment continued. Outlook for the traditionally strong fourth quarter is positive. * Educational book printing strengthened during the third quarter following a slower-than-expected first half of the year. Excess customer inventories had reduced demand, however print activity showed some improvement in the quarter. * Lower advertising spending and magazine attrition rates continue to affect performance of Banta's specialty publications business, although strong market share gains have more than offset the effects of discontinued titles. This business continues to deliver excellent profitability, despite a year-to-date page count reduction of approximately 8 percent. * Banta's supply-chain management sector reported excellent results at its European and Asian operations during the third quarter, benefiting from its strong customer relationships and a favorable product mix. Activity in the U.S., however, was slower than expected due to fewer revenue opportunities from the corporation's major technology customers. While overall supply-chain volume decreased for the quarter, operating margins improved. Banta remains well positioned to meet the growing demand for global outsourcing services, however the current economic environment will make it difficult to match last year's strong fourth quarter performance. * Banta's healthcare unit performed well during the third quarter and nine months on volume comparable to the same period in 2000. Profitability increased 17 percent including benefits as a result of last year's successful global sourcing and domestic manufacturing initiatives. "Throughout the year we have aggressively managed our businesses to achieve solid performance in a difficult economic environment,'' notes Belcher. "This fiscal discipline has been a hallmark of Banta throughout the corporation's history and it has proven especially beneficial as we move through this uncertain period. We have significantly reduced our working capital and we will use our strong cash flow to support growth both internally and through selective acquisitions. "Banta's portfolio of print and supply-chain management businesses continues to produce strong results, demonstrating our ability to deliver solid and predictable returns even in slower economic climates,'' says Belcher. "In supply-chain management we are capitalizing on growth opportunities by expanding our relationships with existing customers and by extending our reach into new market sectors. Our print businesses remain extremely well positioned to leverage our ability to provide customers with a wide range of value-added services, including digital content management, packaging, inventory management and global distribution.'' Banta management believes that its full-year 2001 diluted earnings per share will be modestly below last year's record of $2.35, before the one-time charge taken during this year's first quarter. Expectations for 2002 are for continued growth in sales and earnings, with growth rates in the mid to high single digits, reflective of management's expectation for a gradually improving economy.