UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended December 28, 2002
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from _________ to __________
Commission File Number 1-14637
BANTA CORPORATION
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-0148550
--------------------------------- -----------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) I.D. Number)
225 Main Street, Menasha, Wisconsin 54952
---------------------------------------- -----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (920) 751-7777
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class On Which Registered
------------------------------- -----------------------
Common Stock, $.10 par value New York Stock Exchange
Rights to Purchase Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. (X) Yes ( ) No
Indicate by check mark if disclosure of delinquent files pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). (X) Yes ( ) No
Aggregate market value of voting stock held by non-affiliates of the
registrant as of June 29, 2002: $899,061,000.
Number of shares of common stock outstanding as of February 28, 2003:
25,247,832
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Annual Report to Shareholders for the year ended December
28, 2002 (incorporated into Parts I and II).
(2) Portions of the Definitive Proxy Statement for annual meeting of
shareholders to be held on April 29, 2003 (incorporated into Part III).
PART I
Item 1. Business
General
Banta Corporation (the "Corporation") is a technology and market leader in
its two primary business segments, print and supply-chain management. The
Corporation provides a comprehensive combination of printing and digital imaging
solutions to leading publishers and direct marketers, including catalogs,
publications, product brochures, literature management, educational materials
and e-business services. The Corporation's global supply-chain management
businesses provide a wide range of outsourcing capabilities to the world's
largest technology companies. Services range from component procurement, product
assembly and packaging to inventory control and global distribution. In addition
to its primary segments, the Corporation's healthcare segment produces and
sources disposable products used in outpatient clinics, dental offices and
hospitals. The Corporation was incorporated in Wisconsin in 1901. Its principal
executive offices are located at 225 Main Street, Menasha, Wisconsin 54952. The
Corporation had a total of approximately 8,300 employees at the end of fiscal
2002.
The Corporation operates in two primary business segments, print and
supply-chain management, with a smaller business operation in healthcare
products. Footnote 13 to the Corporation's Consolidated Financial Statements in
the Corporation's Annual Report to Shareholders for the fiscal year ended
December 28, 2002 includes further information on the Corporation's business
segments, which information is incorporated herein by reference.
This document includes forward-looking statements. Statements that describe
future expectations, including revenue and earnings projections, plans, results
or strategies, are considered forward-looking. Such statements are subject to
certain risks and uncertainties which could cause actual results to differ
materially from those currently anticipated. In addition to the risk
considerations discussed on pages four and five below, factors that could affect
actual results include, among others, changes in customers' order patterns or
demand for the Corporation's products and services, changes in raw material
costs and availability, unanticipated changes in operating expenses,
unanticipated production difficulties, unexpected results relating to the
Corporation's ongoing litigation matters, changes in the patterns of outsourcing
supply-chain management functions by customers, unanticipated issues related to
the restructurings and realignments in the catalog and supply-chain management
businesses and expected cost savings related thereto, and any unanticipated
delay in the economic recovery. These factors should be considered in evaluating
the forward-looking statements, and undue reliance should not be placed on such
statements. The forward-looking statements included herein are made as of the
date hereof, and the Corporation undertakes no obligation to update publicly
such statements to reflect subsequent events or circumstances.
Customers
The Corporation sells its products and services to a large number of
customers and generally does not have long-term production contracts with its
print or healthcare customers. Production agreements covering one to three years
are, however, more frequent for supply-chain management services and magazine
production, and to a lesser extent, catalog production. In addition to these
production agreements, during 1999 the Corporation entered into a five-year
agreement with Compaq Computer Corporation (now Hewlett-Packard Company). During
fiscal 2002 revenues under this contract were approximately $115 million and the
Corporation expects comparable revenue for fiscal 2003. Under this contract the
Corporation configures, tests and distributes worldwide Compaq's hard drives
which are used in mid-range and high-end servers typically found in information
technology centers.
Substantially all sales are made to customers through employees of the
Corporation and its subsidiaries based on customer specifications. The fifteen
largest customers accounted for approximately 33%, 34%, and 34% of net sales
during 2002, 2001, and 2000, respectively. No customer accounted for more than
10% of the Corporation's net sales in 2002, 2001, or 2000.
International operations represented 15%, 15%, and 12% of consolidated net
sales and 17%, 14%, and 11% of consolidated assets in 2002, 2001, and 2000,
respectively.
2
Backlog
Lead-time for services varies, depending upon the type of customer, the
industry being serviced and seasonal factors including paper availability.
Backlogs for the printing segment are expressed in terms of time scheduled on
equipment and not dollar value. Consequently, the dollar value of backlog is not
readily available.
Markets Served
The Corporation operates in two primary business segments, print and
supply-chain management, and has other operations that produce and source
healthcare products. These markets are summarized in the following table and
described in greater detail below. Tables in this section set forth the
approximate percentage of segment net sales contributed by each class of similar
products for the last three fiscal years.
2002 2001 2000
---- ---- ----
Print 72% 69% 71%
Supply-chain management 21 24 22
Healthcare 7 7 7
--- --- ---
TOTAL 100% 100% 100%
Print Segment
Within the print segment, the Corporation's operations can be further
subdivided into five general categories:
2002 2001 2000
---- ---- ----
Book 37% 33% 33%
Catalog 22 22 22
Direct Marketing 19 22 21
Publications 18 19 19
Other 4 4 5
--- --- ---
TOTAL 100% 100% 100%
o Book
The Corporation provides the book publishing market with a variety of print
and electronic media products, in addition to a full range of value-added
packaging, fulfillment and distribution services. With seventeen manufacturing
and distribution centers across the United States, the Corporation serves
publishing customers in the educational, trade, professional and religious
segments. The Corporation provides products ranging from soft cover books,
technical manuals and business directories, to specialty calendars, multimedia
kits and instructional games.
o Catalog
Two of the Corporation's facilities produce catalogs primarily for the
specialty and retail catalog markets. In addition, other facilities produce
business-to-business and industrial catalogs. Bindery services within all these
facilities provide ink-jet labeling and demographic binding (which allows
several different versions of the same catalog to be bound simultaneously).
Distribution services are provided by various operating units of the
Corporation, including computerized mail distribution planning systems. These
services assist the Corporation's customers in minimizing postage costs and are
an integral part of catalog printing services. o
3
o Direct Marketing
Printed materials for direct marketing customers are provided by three
facilities. These products vary in format and size and include magazine and
catalog inserts, bill stuffers, brochures, booklets, cards and target market
products designed to sample or sell a product or solicit a response. The
Corporation's imaging technology enables customers to obtain personalized direct
mail pieces at press speeds. The Corporation's direct marketing customers are
primarily marketers of financial services, packaged goods, and retail products
and ad agencies.
o Publications
The Corporation's three facilities serving the magazine market print, sort
and mail nearly 900 different magazines. These magazines are primarily
short-to-medium run publications (usually less than 350,000 copies), which are
generally distributed to subscribers by mail. The Corporation's primary magazine
customers are publishers of specialty magazines, including religious, business
and professional journals and hobby, craft and sporting publications. The
Corporation provides its customers with computerized mailing lists, re-print
services and distribution services.
o Other
Prepress services are provided by several of the Corporation's facilities
to publishers, printers and advertising agencies. Such services include the
conversion of full-color photographs, art and text into color separated film and
digital files for use in the production of printing plates. These units also
provide electronic graphic design, digital photography and on-demand print
services. During the last several years, these units have diversified their
customer base to include packaging customers and have increased their ability to
maximize plant utilization by connecting their facilities through an extensive
network of high-speed telecommunication lines. The Corporation also offers
multiple graphic communication solutions to its customers, interactive online
products for the Internet, including web site design, hosting and maintenance,
and standard or customized electronic commerce solutions.
Supply-Chain Management Segment
Banta Global Turnkey is a global supply-chain management business providing
a wide range of outsourcing capabilities, from component sourcing and
procurement, product assembly and packaging, and customized kitting, to
inventory control and global distribution. Customers include computer hardware,
computer software, communications and networking companies and medical device
manufacturers in North America, Europe, and Asia. The Corporation provides the
systems, technology and infrastructure to manage multiple elements of the supply
chain, integrating the Corporation, the customers and the customer's suppliers
into a common information technology system, thereby increasing capacity while
reducing costs, cycle times and inventory requirements. With nearly two decades
of experience serving the technology marketplace, Banta is a significant
contributor to the evolution of turnkey services around the world.
Healthcare Segment
Banta Healthcare Products produces and sources disposable products used in
outpatient clinics, dental offices and hospitals. The Corporation converts poly
film and paper into single-use products for the healthcare and food service
industries. In addition, this division extrudes films, using both cast and blown
extruders, for use in its manufacturing processes and for sale to external
customers. Its products include sterile microscope drape covers, examination
gowns, stretcher sheets, examination table paper and pillow covers.
Certain Risk Considerations
The Corporation's business is exposed to risk from a variety of factors.
Three key areas of risk, while not intended to be a comprehensive or definitive
list, are summarized below.
o Competition
Within the print segment, the graphic arts industry has continued to
experience consolidation over the last few years. This trend has resulted in
fewer private, independent competitors, creating several competitors that are
larger than the Corporation in size with broader product offerings. The major
competitive factors in the Corporation's print business are quality of finished
products, time to market and distribution capabilities, ongoing
4
customer service, price, availability of time on equipment and schedule
flexibility. The consolidation of customers within certain of the Corporation's
markets provides both greater competitive pricing pressures and opportunities
for increased volume solicitation as customers reduce the number of vendors and
aggregate volume. In recent years, seasonal excess capacity in the printing
industry has resulted in lower unit prices. The Corporation believes it has been
able to remain competitive in part because it is financially able to invest in
modern technologically advanced equipment, which helps reduce unit costs, and
because of productivity gains resulting from Continuous Improvement programs.
The major competitive factors in the Corporation's supply-chain management
segment are customer service, global positioning, price, location relative to
customer manufacturing sites, quality of information technology and the ability
to develop creative and innovative solutions for customer manufacturing,
fulfillment and distribution needs. In recent years, continuing pressure from
customers to reduce cost, reduce time to market and improve quality of service
have led to increased pricing pressures. The Corporation believes it has been
able to remain competitive because of its continued investment in people and
technology to deliver excellent service.
o Customers
The Corporation's supply-chain management segment primarily serves global
technology customers. This concentration of customers within one industry
creates increased risk when there is a significant decline in the economy or in
this industry.
o General Economic Conditions
Global economic conditions have the potential to significantly impact the
Corporation's financial results. Within the print segment, a change in economic
conditions can impact many areas of spending, including government, business and
individual spending. These changes can have a direct impact on the amount of
print business available. Examples include:
o Reductions or increases in state government spending on education
leads to a corresponding decrease or increase in educational
materials, which are produced by the Corporation's Book group.
o Reductions or increases in business spending on advertising
impact advertising page counts in magazines, and the volume of
direct marketing materials. These changes can affect results in
the Corporation's Publication, Direct Marketing and Catalog
groups.
Within the supply-chain management segment, a change in economic condition
that influences individual or business spending on technology has the potential
to significantly affect Banta's major customers in this market, which could
impact the Corporation's financial performance.
Raw Materials
The principal raw material used by the Corporation in the print segment is
paper. Most of the Corporation's production facilities are located in areas with
concentrated papermaking resources, and the Corporation can generally obtain
quality paper at competitive prices. The Corporation is not dependent upon any
one source for its paper or other raw materials.
During 2002, the price of paper decreased on a composite average of
approximately 10%. It is customary for printers to adjust sales prices to
reflect market fluctuations in paper prices. In 2001 and 2000, the price of
paper decreased by approximately 9% and increased by approximately 10%,
respectively. Prices for ink used in certain portions of the print segment of
the business decreased in both 2002 and 2001. The Corporation uses a number of
other raw materials including resins, packaging materials and subcontracted
components. The cost of these materials remained relatively stable in 2002, 2001
and 2000.
Materials used for assembly, testing and fulfillment in the supply-chain
management segment are specific to the customers' product and may include
computer keyboards or components thereof, cables, printed manuals, CD or DVD
media, various hardware components and packing materials. There is no single
dominant raw material used in this business segment.
5
Research and Development
The Corporation is engaged in research and development relating to
technology and system enhancements, and has made significant investments for
such purposes. The Corporation believes that its research and development
investments are above the industry average. One of the objectives of the
technical research and development effort is to establish a competitive
advantage in existing markets by focusing on improving operating procedures,
increasing machine speeds and improving monitoring of paper usage, as well as
working on the development of proprietary inks, coatings, adhesives and machine
modifications.
To help achieve its research and development objectives, the Corporation
maintains labs staffed with full-time personnel whose task is to enhance current
technologies for market-specific applications. The effort is guided by the
Corporation's Research and Development Council, which includes members from the
Corporation's different operating groups. During the last several years, 60
professional and technical employees have been primarily focused on research and
development activities.
Environmental Considerations
The Corporation has environmental compliance programs primarily for the
control of air quality, groundwater quality, disposal of waste material and all
aspects of the work environment involving employee health. Capital expenditures
for air quality equipment have approximated 1% to 3% of total capital
expenditures in each of the last three years. Planned capital expenditures for
environmental control equipment are expected to be in the same range for 2003.
The Corporation also incurs ongoing costs in monitoring compliance with
environmental laws concerning the disposal of waste materials and the
remediation of sites previously used for the disposal of waste materials.
Requirements of the U.S. Environmental Protection Agency and state agencies
nationwide relating to disposal of waste in landfill sites are increasing, thus
creating higher costs for the Corporation and its competitors. Costs for
environmental compliance and waste disposal have not been material to the
Corporation in the past, but management believes that expenditures for these
purposes may have a negative impact on its earnings and those of its competitors
in the future. However, any increased costs are not expected to have a material
impact on the Corporation's competitive position, assuming similar costs are
required of competitors. The Corporation does not believe at the present time
that any cost, claims or penalties that may be incurred or assessed under
environmental laws, in connection with known environmental assessment and
remediation matters, beyond any reserves already provided, will have a material
adverse effect upon the operations or consolidated financial position of the
Corporation.
Foreign Operations
Footnote 13 to the Corporation's Consolidated Financial Statements in the
Corporation's Annual Report to Shareholders for the fiscal year ended December
28, 2002 includes information on the Corporation's foreign operations. The
disclosures contained in such footnote are hereby incorporated herein by
reference.
Seasonality
There is no significant seasonal pattern to the Corporation's consolidated
quarterly sales and earnings.
Available Information
The Corporation's Internet address is http://www.banta.com. The Corporation
makes available free of charge (other than an investor's own Internet access
charges) through its Internet website the Corporation's Annual Report on Form
10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and
amendments to those reports, as soon as reasonably practicable after it
electronically files such material with, or furnishes such material to, the
Securities and Exchange Commission. The Corporation is not including the
information contained on or available through its website as a part of, or
incorporating such information by reference into, this Annual Report on Form
10-K.
6
EXECUTIVE OFFICERS OF THE CORPORATION
Name, Age, Position Business Experience During Last Five Years
------------------- ------------------------------------------
Donald D. Belcher; 64............... Chairman of the Company since May 1995;
Chairman Chief Executive Officer of the Company
from January 1995 to October 2002;
President of the Company from September
1994 to January 2001.
Stephanie A. Streeter; 45........... President and Chief Executive Officer
Chief Executive Officer since October 2002; President and Chief
and President Operating Officer from January 2001 to
August 2002; Chief Operating Officer of
idealab! (creator and operator of Internet
Business) from January 2000 to December
2000; Group Vice President of Avery
Dennison (diversified manufacturing
company) from 1996 to 2000.
Gerald A. Henseler; 62.............. Executive Vice President and Chief
Executive Vice President Financial Officer of the Corporation since
and Chief Financial Officer January 2003. Mr. Henseler had previously
served in such capacity until retiring as
Chief Financial Officer in March 2002 and
as Executive Vice President in August
2002.
Ronald D. Kneezel; 46............... Vice President, General Counsel and
Vice President, General Secretary of the Corporation.
Counsel and Secretary
Dennis J. Meyer; 47................. Vice President Marketing and Planning of
Vice President Marketing the Corporation.
and Planning
Frank W. Rudolph; 46................ Vice President Human Resources of the
Vice President Human Resources Corporation since September 2000; Chief
Administrative Officer of Overhead Door
Corporation (designer, manufacturer and
distributor of entrance systems) from 1997
until joining the Corporation.
There are no family relationships among the executive officers of the
Corporation.
All of the executive officers are elected or appointed annually by the
Corporation's Board of Directors. Each officer holds office until his or her
successor has been elected or appointed or until his or her death, resignation
or removal.
7
Item 2. Properties
At the end of fiscal 2002, the Corporation's operations were conducted at
34 production facilities in the United States and at seven foreign production
facilities. The detail of the domestic owned and leased facilities by state,
along with total square footage is as follows:
Print Segment Supply-Chain Management Segment
---------------------------------------------------- ------------------------------------------------
Owned Leased Total Owned Leased Total
State Facilities Facilities Facilities State Facilities Facilities Facilities
---------------------------------------------------- ------------------------------------------------
Connecticut 1 - 1 Texas - 1 1
Georgia - 1 1 Wisconsin - 1 1
------------------------------------------------
Illinois - 2 2 Total - 2 2
Massachusetts - 1 1
Minnesota 5 4 9
Missouri 1 - 1
Ohio 1 - 1
Tennessee 1 1 2
Healthcare Segment
Utah 1 1 2 ------------------------------------------------
Owned Leased Total
Virginia 2 - 2 State Facilities Facilities Facilities
------------------------------------------------
Washington - 1 1 Wisconsin 1 - 1
Wisconsin 3 4 7 California 1 - 1
---------------------------------------------------- ------------------------------------------------
Total 15 15 30 Total 2 - 2
Square Footage of owned facilities:
Office Space 368,000
Manufacturing 2,068,000
Warehouse 1,827,000
---------
Total 4,263,000
=========
Foreign production facilities located in Ireland, Scotland, The
Netherlands, Mexico and Singapore are also leased. The total of all leased
facilities contain approximately 2,874,000 square feet of space. The buildings
owned and leased by the Corporation are primarily of steel and brick
construction, and are considered well maintained and adequate for the
Corporation's needs.
Item 3. Legal Proceedings
The Corporation is a defendant in an action commenced by the creditors'
committee in the Xyan.com, Inc. (Xyan.com) bankruptcy matter. The claim relates
to transactions that occurred in 2001 in which the Corporation acquired certain
assets from Xyan.com. The creditors' committee is currently seeking recovery of
approximately $4 million to $6 million. The Corporation is also involved in
litigation relating to its proposed acquisition of Singapore-based Mentor Media
Ltd. (Mentor). The Corporation in June 2002 entered into agreements to acquire
Mentor for approximately $70 million. The Corporation has filed an action in
Singapore seeking to terminate these agreements based on misrepresentations and
failure of conditions precedent. The Corporation believes that it has
meritorious grounds in both cases to obtain results that are favorable to the
Corporation. However, in the event that one or both cases were decided in a
manner unfavorable to the Corporation, such result could adversely impact the
Corporation's results of operations or financial condition.
In the ordinary course of its business, the Corporation is also involved in
other litigation matters. Based on the Corporation's assessment of these matters
and on the existing reserves provided for them, the Corporation does not believe
that any of these matters, either individually or in the aggregate, will have a
material adverse effect on its results of operations or financial condition.
8
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Corporation's shareholders
during the quarter ended December 28, 2002.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The Corporation's stock is listed on the New York Stock Exchange.
Under long-term debt agreements to which the Corporation is a party, the
payment of cash dividends by the Corporation is subject to certain limitations.
As of December 28, 2002, approximately $105,818,000 of retained earnings were
not restricted under these agreements.
The information set forth under the caption "Dividend Record and Market
Prices" in the Corporation's Annual Report to Shareholders for the fiscal year
ended December 28, 2002 is hereby incorporated herein by reference in response
to this Item.
Item 6. Selected Financial Data
The information set forth under the caption "Five-Year Summary of Selected
Financial Data" (but excluding the graphs related thereto) in the Corporation's
Annual Report to Shareholders for the fiscal year ended December 28, 2002 is
hereby incorporated herein by reference in response to this Item.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The information set forth under the caption "Management's Discussion and
Analysis" in the Corporation's Annual Report to Shareholders for the fiscal year
ended December 28, 2002 is hereby incorporated herein by reference in response
to this Item.
Item 7A. Quantitative and Qualitative Discussion about Market Risk
The information set forth under the caption "Management's Discussion and
Analysis" in the Corporation's Annual Report to Shareholders for the fiscal year
ended December 28, 2002 is hereby incorporated herein by reference in response
to this Item.
Item 8. Financial Statements and Supplementary Data
The Consolidated Balance Sheets of the Corporation and subsidiaries as of
December 28, 2002 and December 29, 2001 and the related consolidated Statements
of Earnings, Cash Flows and Shareholders' Investment for the fiscal years ended
December 28, 2002, December 29, 2001, and December 30, 2000, together with the
related notes thereto and the Report of Ernst & Young LLP, Independent Auditors
thereon set forth in the Corporation's Annual Report to Shareholders for the
fiscal year ended December 28, 2002, are hereby incorporated herein by reference
in response to a portion of this Item.
The information set forth under the caption "Unaudited Quarterly Financial
Information" in the Corporation's Annual Report to Shareholders for the fiscal
year ended December 28, 2002 is hereby incorporated herein by reference in
response to a portion of this Item.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
On May 17, 2002, the Board of Directors of the Corporation, upon the
recommendation of its Audit Committee, dismissed Arthur Andersen LLP as the
Corporation's independent accountants and engaged Ernst & Young LLP to serve as
the Corporation's independent accountants for 2002. Information regarding the
change in the Corporation's principal accountants was provided in the
Corporation's Current Report on Form 8-K, filed May 23, 2002. The letter from
Arthur Andersen LLP stating the firm's agreement with the information provided
in the Current Report on Form 8-K was filed as an exhibit thereto.
9
PART III
Item 10. Directors and Executive Officers of the Registrant
The information under the captions "Election of Directors" and "Other
Matters-Section 16(a) Beneficial Ownership Reporting Compliance" contained in
the Corporation's definitive proxy statement for the annual meeting of
shareholders to be held on April 29, 2003, as filed with the Securities Exchange
Commission, is hereby incorporated herein by reference in response to a portion
of this Item. Reference is also made to the information under the heading
"Executive Officers of the Corporation" included under Item 1 of Part I of this
report.
Item 11. Executive Compensation
The information under the captions "Board of Directors" and "Executive
Compensation" (other than the information under the subheading "Committee Report
on Executive Compensation") contained in the Corporation's definitive proxy
statement for the annual meeting of shareholders to be held on April 29, 2003,
as filed with the Securities and Exchange Commission, is hereby incorporated
herein by reference in response to this Item.
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Shareholder Matters
The information under the caption "Stock Ownership" contained in the
Corporation's definitive proxy statement for the annual meeting of shareholders
to be held on April 29, 2003, as filed with the Securities and Exchange
Commission, is hereby incorporated herein by reference in response to this Item.
The following table provides information about the Corporation's equity
compensation plans (including individual compensation arrangements) as of
December 28, 2002.
------------------------------- ----------------------- -------------------- -------------------------
Number of securities
remaining available for
Number of securities future issuance under
to be issued upon Weighted-average equity compensation plans
upon the exercise of exercise price of (excluding securities
outstanding options, outstanding options, reflected in the
Plan category warrants and rights (1) warrants and rights first column) (2)
------------------------------- ----------------------- -------------------- -------------------------
Equity compensation plans
approved by security holders 2,735,235 $ 27.45 1,503,965
------------------------------- ----------------------- -------------------- -------------------------
Equity compensation plans not
approved by security holders 23,662
------------------------------- ----------------------- -------------------- -------------------------
Total 2,735,235 $ 27.45 1,527,627
------------------------------- ----------------------- -------------------- -------------------------
(1) Represents options to purchase the Corporation's common stock granted under the Corporation's 1991
Stock Option Plan and Equity Incentive Plan, as amended.
(2) Includes 218,994 shares of the Corporation's common stock available for issuance under the
Corporation's 1991 Stock Option Plan and 1,284,971 shares of the Corporation's common stock
available for issuance under the Corporation's Equity Incentive Plan, as amended.
The Corporation's only equity compensation plan not approved by security
holders is the Banta Corporation Director Stock Grant Plan. Under that plan, in
January of each year, each of the Corporation's non-employee directors is
granted shares of common stock with a market value equal to 50% of the then
current annual retainer fee payable to the Corporation's directors. In lieu of
receiving shares of common stock under the Director Stock Grant Plan,
non-employee directors are allowed to defer such award pursuant to the terms of
the Corporation's deferred compensation plan for its directors.
Item 13. Certain Relationships and Related Transactions
The information under the caption "Other Matters - Related Party
Transaction" contained in the Corporation's definitive proxy statement for the
annual meeting of shareholders to be held on April 29, 2003, as filed with the
Securities and Exchange Commission, is hereby incorporated herein by reference
in response to this Item.
10
Item 14. Controls and Procedures
(a) Within the 90-day period prior to the filing of this report, an
evaluation was carried out under the supervision and with the
participation of the Corporation's management, including the
Corporation's Chief Executive Officer and Chief Financial Officer, of
the effectiveness of the design and operation of the Corporation's
disclosure controls and procedures (as defined in Rule 13a-14(c) under
the Securities Exchange Act of 1934). Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that the
design and operation of these disclosure controls and procedures were
effective.
(b) No significant changes were made in the Corporation's internal
controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation.
11
PART IV
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as part of this report:
PAGE REFERENCE
FORM ANNUAL REPORT
10-K TO SHAREHOLDERS
---- ---------------
1. Financial Statements:
Report of Ernst & Young LLP, Independent Auditors 33
Report of Arthur Andersen LLP, Independent
Public Accountants 35
Consolidated Balance Sheets at
December 28, 2002 and December 29, 2001 20
For each of the three years in the period ended
December 28, 2002:
Consolidated Statements of Earnings 21
Consolidated Statements of Cash Flows 22
Consolidated Statements of
Shareholders' Investment 23
Notes to Consolidated Financial Statements 24-31
2. Financial Statement Schedule:
Report of Arthur Andersen LLP on Financial
Statement Schedule 16
Schedule II - Valuation and Qualifying Accounts 17
All other schedules have been omitted since the required information is
included in the consolidated financial statements or notes thereto, or
because the information is not required or applicable.
3. Exhibits:
(a) Articles of Incorporation, as amended (1)
(b) Bylaws amendment effective April 23, 2002 (2)
(c) Bylaws, as amended (3)
4. (a) Note Purchase Agreement dated June 24, 1988 (4)
(b) Promissory Note Agreement dated July 17, 1990 (5)
(c) Rights Agreement dated November 5, 2001 (6)
(d) Amendment to Rights Agreement dated September 30, 2002 (7)
(e) Note Purchase and Private Shelf Agreement dated May 12, 1994 (8)
(f) Amendment to Promissory Note Agreement dated July 17, 1990 (9)
(g) Note Purchase and Medium-term Note Agreement Dated November 2,
1995 (10)
(h) Credit Agreement dated March 10, 2000 (11)
(i) Amendment to Purchase and Private Shelf Agreement dated May 12,
1994 (12)
Note: The registrant has outstanding certain issues of industrial revenue
bonds, none of which authorize the issuance of securities in an amount
exceeding 10% of the registrant's consolidated assets. The registrant
hereby agrees to furnish to the Commission upon request a copy of any
instrument with respect to long-term debt under which the total amount of
securities authorized does not exceed 10% of the registrant's consolidated
assets.
12
*10. (a) Amended and Restated Supplemental Retirement Plan for Key
Employees (13)
(b) Agreement with Ronald D. Kneezel (14)
(c) Form of Agreement with Stephanie A. Streeter and Dennis J. Meyer (15)
(d) Agreement with Donald D. Belcher (16)
(e) 1985 Deferred Compensation Plan for Key Employees, as amended and
restated (17)
(f) 1988 Deferred Compensation Plan for Key Employees, as amended and
restated (18)
(g) Basic Form of Deferred Compensation Agreements under (pre-January
1994) 1985 and 1988 Deferred Compensation Plans for Key Employees(19)
(h) Basic Form of Deferred Compensation under (post-December 1993) 1988
Deferred Compensation plan for Key Employees (20)
(i) Deferred Compensation Plan for Directors, as amended (21)
(j) Revised Form of Indemnity Agreements with Directors and Certain
Officers (22)
(k) Executive Trust Agreement (23)
(l) Amendment to Executive Trust Agreement (24)
(m) 1991 Stock Option Plan, as amended (25)
(n) Description of Supplemental Long-term Disability Plan (26)
(o) Letter Agreement with Donald D. Belcher (27)
(p) Agreement with Gerald A. Henseler (28)
(q) Banta Corporation 1995 Equity Incentive Plan, as amended (29)
(r) Banta Corporation Director Stock Grant Plan (30)
(s) Agreement with Stephanie A. Streeter (31)
(t) Amendment to the Deferred Compensation Plans for Key Employees (32)
(u) Executive Deferred Compensation Plan "B" (33)
(v) Economic Profit Incentive Compensation Plan, as amended and
restated (34)
(w) Economic Profit Long-Term Incentive Compensation Plan, as amended and
restated (35)
(x) Supplemental Retirement Plan for Donald D. Belcher
13. Portions of Annual Report to Shareholders for the fiscal year ended
December 28, 2002 that are incorporated by reference herein.
21. List of Subsidiaries.
23. Consent of Independent Auditors
99.1 Written Statement of Chief Executive Officer pursuant to 18 U.S.C. Section
1350
99.2 Written Statement of Chief Financial Officer pursuant to 18 U.S.C. Section
1350
* Exhibits 10(a) through 10(x) are management contracts or compensatory plans or
arrangements.
All documents incorporated herein by reference are filed with the Commission
under File No. 1-14637.
13
(1) Exhibit No. 19(b) to Form 10-Q for the quarter ended April 3, 1993 is
hereby incorporated herein by reference.
(2) Exhibit No. 3.1 to Form 10-Q for the quarter ended June 29, 2002 is hereby
incorporated herein by reference.
(3) Exhibit No. 3.2 to Form 10-Q for the quarter ended June 29, 2002 is hereby
incorporated herein by reference.
(4) Exhibit No. 4(a) to Form 10-Q for the quarter ended July 2, 1988 is hereby
incorporated herein by reference.
(5) Exhibit No. 4 to Form 10-Q for the quarter ended September 29, 1990 is
hereby incorporated herein by reference.
(6) Exhibit No. 4.1 to the Form 8-A Registration Statement dated November 5,
2001 is hereby incorporated herein by reference.
(7) Exhibit No. 4.1 to the Form 10-Q for the quarter ended September 28, 2002
is hereby incorporated herein by reference.
(8) Exhibit No. 4(a) to Form 10-Q for the quarter ended July 2, 1994 is hereby
incorporated herein by reference.
(9) Exhibit No. 4(c) to Form 10-Q for the quarter ended July 2, 1994 is hereby
incorporated herein by reference.
(10) Exhibit No. 4(a) to Form 10-Q for the quarter ended September 30, 1995 is
hereby incorporated herein by reference.
(11) Exhibit No. 4(a) to Form 10-Q for the quarter ended April 1, 2000 is hereby
incorporated herein by reference.
(12) Exhibit No. 4.1 to Form 10-Q for the quarter ended July 1, 2000 is hereby
incorporated herein by reference.
(13) Exhibit No. 10 to Form 10-K for the year ended January 1, 1983 is hereby
incorporated herein by reference.
(14) Exhibit No. 10(d) to Form 10-K for the year ended January 1, 2000 is hereby
incorporated herein by reference.
(15) Exhibit No. 10(e) to Form 10-K for the year ended January 1, 2000 is hereby
incorporated herein by reference.
(16) Exhibit No. 10(f) to Form 10-K for the year ended January 1, 2000 is hereby
incorporated herein by reference.
(17) Exhibit No. 10(j) to Form 10-K for the year ended December 30, 1989 is
hereby incorporated herein by reference.
(18) Exhibit No. 10(a) to Form 10-Q for the quarter ended April 2, 1994 is
hereby incorporated herein by reference.
(19) Exhibit No. 10(l) to Form 10-K for the year ended December 30, 1989 is
hereby incorporated herein by reference.
(20) Exhibit No. 10(b) to Form 10-Q for the quarter ended April 2, 1994 is
hereby incorporated herein by reference.
14
(21) Exhibit No. 10(m) to Form 10-K for the year ended December 28, 1996 is
hereby incorporated herein by reference.
(22) Exhibit No. 10(a) to Form 10-Q for the quarter ended March 28, 1992 is
hereby incorporated herein by reference . (23) Exhibit No. 10(r) to Form
10-K for the year ended December 30, 1989 is hereby incorporated herein by
reference.
(24) Exhibit No. 10(s) to Form 10-K for the year ended January 1, 1994 is hereby
incorporated herein by reference.
(25) Exhibit No. 10(t) to Form 10-K for the year ended December 28, 1996 is
hereby incorporated herein by reference.
(26) Exhibit No. 10(a) to Form 10-Q for the quarter ended October 2, 1993 is
hereby incorporated herein by reference.
(27) Exhibit No. 10(a) to Form 10-Q for the quarter ended October 1, 1994 is
hereby incorporated herein by reference.
(28) Exhibit No. 10(dd) to Form 10-K for the year ended December 31, 1994 is
hereby incorporated herein by reference.
(29) Exhibit No. 10.1 to Form 10-Q for the quarter ended June 30, 2001 is hereby
incorporated herein by reference.
(30) Exhibit No. 10(z) to Form 10-K for the year ended December 28, 1996 is
hereby incorporated herein by reference.
(31) Exhibit No. 10(w) to Form 10-K for the year ended December 30, 2000 is
hereby incorporated herein by reference.
(32) Exhibit No. 10 (x) to Form 10-K for the year ended December 30, 2000 is
hereby incorporated herein by reference.
(33) Exhibit No. 10.2 to Form 10-Q for the quarter ended June 30, 2001 is hereby
incorporated herein by reference.
(34) Exhibit No. 10(w) to Form 10-K for the year ended December 29, 2001 is
hereby incorporated herein by reference.
(35) Exhibit No. 10(x) to Form 10-K for the year ended December 29, 2001 is
hereby incorporated herein by reference.
All documents incorporated herein by reference are filed with the Commission
under File No. 1-14637.
(b) The Corporation has filed no Current Reports on Form 8-K during the last
quarter of the year covered by this report.
(c) The exhibits required to be filed are identified in Item 15(a)3. above.
15
Note: This is a copy of the audit report previously incorporated by reference
or issued by Arthur Andersen LLP ("Andersen") in connection with the Banta
Corporation Form 10-K filing for the fiscal year ended December 29, 2001. The
inclusion of this previously issued Andersen report is pursuant to the
"Temporary Final Rule and Final Rule Requirements for Arthur Andersen LLP
Auditing Clients," issued by the U.S. Securities and Exchange Commission in
March 2002. Note that this previously issued Andersen report includes
references to certain fiscal years, which are not required to be presented in
the accompanying consolidated financial statements as of and for the years ended
December 28, 2002 and December 29, 2001. This audit report has not been
reissued by Arthur Andersen LLP in connection with this filing on Form 10-K.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have audited in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements included in the Banta
Corporation annual report to shareholders incorporated by reference in this Form
10-K, and have issued our report thereon dated January 28, 2002. Our audit was
made for the purpose of forming an opinion on those statements taken as a whole.
The schedule listed in the index in item 14(a) (2) is the responsibility of the
Corporation's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
consolidated financial statements. The schedule has been subjected to the
auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Milwaukee, Wisconsin
January 28, 2002
16
BANTA CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 28, 2002, DECEMBER 29, 2001 AND DECEMBER 30, 2000
DOLLARS IN THOUSANDS
---------------------------------------------------------------
BALANCE, ADDITIONS CHARGES BALANCE,
BEGINNING CHARGED TO TO RESERVE, END OF
OF YEAR EARNINGS NET OTHER YEAR
--------- ---------- ----------- ------- --------
Reserve for
Doubtful
Receivables:
2002 $ 7,084 $ 1,677 $ 2,179 $ 0 $ 6,582
======== ========= ========= ======= =======
2001 $ 8,105 $ 3,644 $ 4,665 $ 0 $ 7,084
======== ========= ========= ======= =======
2000 $ 4,927 $ 4,643 $ 1,832 $ 367(1) $ 8,105
======== ========= ========= ======= =======
(1) Consists of additions to the reserve related to acquisitions.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
BANTA CORPORATION
DATE: March 27, 2003 BY: /s/ Stephanie A. Streeter
-------------------- ------------------------------------
Stephanie A. Streeter, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Donald D. Belcher March 27, 2003
---------------------------------------------------- ---------------------
Donald D. Belcher, Chairman of the Board
and Director
/s/ Stephanie A. Streeter March 27, 2003
---------------------------------------------------- ---------------------
Stephanie A. Streeter, President, Chief
Executive Officer, and Director
/s/ Gerald A. Henseler March 27, 2003
---------------------------------------------------- ---------------------
Gerald A. Henseler, Executive Vice
President, Chief Financial Officer
and Chief Accounting Officer
/s/ Jameson Adkins Baxter March 27, 2003
---------------------------------------------------- ---------------------
Jameson Adkins Baxter, Director
/s/ John F. Bergstrom March 27, 2003
---------------------------------------------------- ---------------------
John F. Bergstrom, Director
/s/ Ursula M. Burns March 27, 2003
---------------------------------------------------- ---------------------
Ursula M. Burns, Director
/s/ Henry T. DeNero March 27, 2003
---------------------------------------------------- ---------------------
Henry T. DeNero, Director
/s/ Richard L. Gunderson March 27, 2003
---------------------------------------------------- ---------------------
Richard L. Gunderson, Director
/s/ Ray C. Richelsen March 27, 2003
---------------------------------------------------- ---------------------
Ray C. Richelsen, Director
/s/ Michael J. Winkler March 27, 2003
---------------------------------------------------- ---------------------
Michael J. Winkler, Director
CERTIFICATIONS
I, Stephanie A. Streeter, certify that:
1) I have reviewed this annual report on Form 10-K of Banta Corporation;
2) Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3) Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;
4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6) The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: March 27, 2003
/s/ Stephanie A. Streeter
-------------------------------------
Stephanie A. Streeter
President and Chief Executive Officer
I, Gerald A. Henseler, certify that:
1) I have reviewed this annual report on Form 10-K of Banta Corporation;
2) Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3) Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;
4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure
5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6) The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: March 27, 2003
/s/ Gerald A. Henseler
-------------------------------------
Gerald A. Henseler
Executive Vice President and Chief
Financial Officer
Banta Corporation File No. 1-14637
Form 10-K, Year Ended December 28, 2002
EXHIBIT INDEX
_____________________
Exhibit Number
--------------
10.1 Supplemental Retirement Plan for Donald D. Belcher
13. Portions of the Annual Report to Shareholders for the fiscal
year ended December 28, 2002
21. List of Subsidiaries
23. Consent of Independent Auditors
99.1 Written Statement of Chief Executive Officer Pursuant to
18 U.S.C. Section 1350
99.2 Written Statement of Chief Financial Officer Pursuant to
18 U.S.C. Section 1350