Banta Reports Solid 2001 Performance, Net Income Drops 5%
Press release from the issuing company
MENASHA, Wis., Jan. 29 Banta today reported solid results for the fourth quarter and full-year 2001. A diversified business mix, strong market positioning and aggressive cost controls enabled the company to post sales and earnings nearly equal to the record levels achieved in 2000.
Full-year diluted earnings per share were $2.31 compared with last year's $2.35, before a one-time $7.5 million after-tax charge (30 cents per diluted share) recorded during 2001's first quarter. The charge was a non-operating, non-cash write-off related to Banta's minority investment in XYAN.com. Net earnings for the year were $57.5 million, down only 2 percent from 2000's record $58.7 million, before the one-time charge. 2001 sales were $1.45 billion compared with $1.54 billion last year.
Diluted earnings per share for 2001's fourth quarter were 65 cents versus 69 cents in the year-earlier quarter. Net earnings were $16.1 million compared with $17.0 million in 2000. Fourth quarter sales were $366 million versus last year's $420 million.
Chairman and Chief Executive Officer Donald D. Belcher says Banta performed extremely well considering the difficult economic environment, recording 2001 results only modestly below the all-time highs established in 2000. Earnings and EPS before the charge were nearly flat versus last year, while sales decreased 6 percent. Nearly 40 percent of the sales decline was due to paper price reductions.
"We are very pleased with our 2001 performance,'' says Belcher, "Throughout this past year we focused on expanding customer relationships, broadening our value-added services and driving down operational costs. The success of these actions is visible in our performance, as we recorded the second best year in our history. Early in the year, as signs of economic softness began to appear, we instituted stringent cost and expense controls, and reduced capital spending by nearly 50 percent. We have made certain these actions will not diminish our ability to respond to increasing demand as the economy strengthens. In addition, we expect many of the expense reductions and efficiency measures will provide continuing benefits and strengthen future growth opportunities.''
The corporation aggressively managed its cash and working capital requirements, notes Belcher. "We reduced our capital expenditures by over $50 million and year-end material inventories reached a record low, creating a very strong year-end cash position.''
Operational highlights for the fourth quarter and year include the following:
* Despite the softening in the technology sector, Banta's global supply-chain management business delivered another strong year of growth and profitability. Both sales and earnings for the year were higher than 2000 due to the expansion of existing customer relationships, and the growing trend among many companies to outsource non-core functions.
* Results in Banta's print sector were mixed: -- Both the consumer catalog and direct marketing divisions recorded profit gains, with encouraging activity continuing through the fourth quarter. While full-year sales were modestly lower than 2000, both businesses delivered strong earnings growth and increased margins versus the prior year, driven by performance improvement initiatives. In addition, increasing demand for one-to-one marketing solutions created strong utilization of Banta's sophisticated high-speed, inline imaging and personalization systems, particularly in the financial services sector.
* Banta's book operations had a challenging year due to weakening activity in the educational sector. Anticipated increases in federal and state funding for education did not materialize, resulting in excess publisher inventories, which affected the first half of 2001. Print activity improved during the final six months of the year, however, and encouraging momentum has developed for the first half of 2002.
* The Publications Group performed well this past year, despite a significantly reduced advertising environment. For the fourth quarter, page counts for Banta's special-interest magazines fell 16 percent compared to the same period in 2000, with the full-year reduction at about 10 percent. Despite the page reductions and an unusually high incidence of magazine attrition, Banta increased the number of magazines it produces to just over 800, gaining new customers and titles, and increasing its market share.
* The corporation's healthcare business continues to realize benefits from the prior year's successful global sourcing and domestic manufacturing initiatives, reducing costs and providing customers with lower-priced product options. The healthcare business recorded good profit improvement on a modest sales decrease.
"Our diverse business portfolio enabled us to deliver solid results during a difficult year,'' notes Belcher. "Our entire organization focused on containing costs, maximizing manufacturing performance and aggressively pursuing marketplace opportunities. Banta has never been stronger as an organization, nor better prepared for accelerated growth once the economic recovery begins.''
Banta management believes that with current economic conditions continuing in the first half of 2002, Banta's earnings for the first six months of the year will be comparable to the same period in 2001, before last year's one-time write-off. Expectations for the full-year 2002 are for continued growth in sales and earnings, with growth rates in the mid-single digits, reflective of management's expectation for a gradually improving economy.
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