NORTHBROOK, Ill.-General Binding Corporation (Nasdaq: GBND) today reported sales of $225.7 million for the third quarter of 2000, compared to sales of $218.2 million posted for the same period in 1999. Net income for the quarter was $0.6 million, or $0.04 per diluted share. Included in the third quarter results were expenses totaling $1.6 million before taxes, or $0.03 per share, for consulting projects. The Company's third quarter results should be compared to a loss of $0.27 per share in 1999's third quarter, net of special provisions and restructuring charges. Cash flow, as measured by EBITDA (earnings before interest, taxes, depreciation, amortization and certain special items) was $24.7 million, up sharply from the $8.0 million for the same period last year and up 10% from the $22.5 million posted in the second quarter of 2000. Last year's results included charges of $8 million related to customer credits for plan-o-gram changes and returned goods in the Office Products Group. Total debt at the end of the quarter was $426 million, down $44 million from the $470 million balance at the beginning of the year. Third quarter sales in the Company's Office Products Group were up solidly over last year, increasing 15%, or $13.0 million. Most of the increase was due to the aforementioned lower level of customer credits and to higher sales of visual communication products. This increase was offset by lower sales in the Europe Group. Europe's sales were down $6.3 million from last year, primarily due to the exiting of various product lines earlier this year and weaker European currencies during the period. Sales in the Films and Document Finishing Groups were each up slightly during the quarter. Operating income in the Office Products Group was up $13.7 million in the quarter over last year's loss of $2.5 million, with most of the gain resulting from the reduction in customer credits, as well as favorable manufacturing variances and the improved sales level. Films' operating income increased 16% over last year, mainly due to lower operating expenses. Document Finishing's operating income was flat compared to last year, in line with the slight increase in its sales for the same period. Europe posted a loss of $1.3 million for the quarter, compared to a loss of $3.4 million last year. Most of the losses in Europe continue to primarily be related to the decline in European currencies vis-a-vis the U.S. dollar, as roughly half of the Europe Group's products are currently sourced in U.S. dollars. Among other operating income items, the aforementioned charges for consulting projects of $1.6 million comprised the bulk of the increase from last year. "This third quarter marks the fourth consecutive quarter of solid improvement in cash flows," said Govi C. Reddy, President and Chief Executive Officer. "Our largest business, the Office Products Group, is leading the way as it continues to perform well in a very challenging environment. Our leadership team there has done a great job of managing through the issues that arose last year while maintaining GBC's leading brand positions in the office products channel. The Films business is also helping by tracking with expectations, but we are still seeing slower-than-expected sales momentum in the Document Finishing and Europe Groups. Sales productivity in Europe is expected to recover more gradually, and it will likely face continuing challenges related to weak European currencies." "Overall," Mr. Reddy continued, " we are pleased to be continuing to build off the successes of the various programs we undertook last year to enhance shareholder value. In addition to our focus on sales and marketing efforts, we have a team of internal resources, as well as outside consulting services, working diligently on some of our more important programs, specifically in the areas of SKU rationalization, supply chain management and strategic planning. Our outside resources are helping to accelerate the work and ensure that best practices are incorporated into our businesses, particularly in the areas of technology opportunities, organizational structure and business portfolio management. These efforts, coupled with our strong management team, leading market positions and strong customer relationships, will help position GBC for continuing solid growth next year."