Banta Plans Restructuring
MENASHA, WI—Banta Corp. has reported a 98 percent drop in fourth quarter net income, as well as plans to restructure its consumer catalog business and supply-chain management activities. The company says that its fourth quarter net earnings fell to $392,000, from $16.1 million a year earlier. This was largely due to a non-cash impairment charge of $26.8 million.
As a result of the restructuring, Banta expects to take pretax charges of $15 million to $18 million, primarily in the second and third quarters of this year. The restructuring is expected to generate annual savings of $8 million to $10 million beginning in 2004, with a modest benefit expected in fourth quarter 2003.
The major portion of the restructuring involves the consolidation of Banta's consumer catalog group, with the primary cost being the closing of its catalog plant in St. Paul, MN, one of Banta's oldest and least efficient operations.
Catalog production will be consolidated at the corporation's largest and most efficient catalog plant in nearby Maple Grove, MN, and at other Banta facilities with available capacity and similar production capabilities.
"We remain committed to the consumer catalog market," emphasizes Stephanie Streeter, Banta president and CEO, noting that Banta's catalog plant in Maple Grove expects to launch a major expansion program later this year.
The St. Paul plant closure is expected to eliminate 300 jobs. "We regret any job loss due to our restructuring, and are taking every possible action to keep that number to a minimum," states Streeter. "Affected employees will be encouraged to apply for positions at our other operations, and for those employees displaced, we will provide severance packages and assist with outplacement services," she says.
Actions within Banta's supply chain management sector entail realigning various operating activities to maximize efficiencies and create greater facility utilization. "While operationally most of our units are performing atexcellent levels, there are always opportunities to improve," remarks Streeter. "As we have previously indicated, given the continuing soft economy, over the past several months we have been actively examining various options to properly balance our revenue and production capacity. The restructuring actions we are announcing are a result of that analysis."