Courier Corporation Reports Higher Sales and Earnings; Education Markets Key to Double-Digit Sales Gain.NORTH CHELMSFORD Chelmsford, city, England Chelmsford, city (1991 pop. 91,109), county seat of Essex, SE England. It is a market center (especially for cattle) for the surrounding agricultural district. , Mass. -- Courier A monospaced typeface originating from the typewriter that is commonly used for letters. It is still considered by many to be the "appropriate" typeface for business correspondence. Corporation (Nasdaq: CRRC CRRC Cool Roof Rating Council CRRC Combat Rubber Raiding Craft CRRC Caucasus Research Resource Center CRRC California Refuse Removal Council CRRC Chesapeake Regional Ranges Cooperative CRRC Construction Requirements Review Committee CRRC Combat Rigid Raiding Craft ), one of America's leading book manufacturers and specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. publishers, today announced results for the quarter ending December December: see month. 25, 2004, the first quarter of its 2005 fiscal year. Continuing its pattern of higher sales to the education market, the company reported $51.3 million in revenues for the quarter, up 10% from last year's first-quarter sales of $46.8 million. Net income for the quarter was $4.1 million or $.50 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, an increase of 6% over prior-year results of $3.9 million or $.48 per diluted share. Both of the company's operating segments reported increased sales. Book manufacturing sales were up 8%, with strong textbook textbook Informatics A treatise on a particular subject. See Bible. demand contributing to a 20% increase in four-color four-col·or adj. Of or being an overprinting or photographic process in which three primary colors and black are transferred by four different plates or filters to a surface, reproducing the colors of the subject matter. printing sales. Sales in Courier's specialty book publishing book publishing. The term publishing means, in the broadest sense, making something publicly known. Usually it refers to the issuing of printed materials, such as books, magazines, periodicals, and the like. segment were up 13%, with most of the increase attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the inclusion of sales from Research & Education Association (REA REA Rural Electrification Administration REA Rural Electric Association REA Railway Express Agency REA Repertorio Economico Amministrativo REA Rapid Environmental Assessment REA Resident Evil: Apocalypse (movie) ), acquired by Courier in January January: see month. 2004. "Our new fiscal year is off to a promising start, especially in book manufacturing," said Courier Chairman and Chief Executive Officer James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. F. Conway Conway, city, United States Conway, city (1990 pop. 26,481), seat of Faulkner co., central Ark., in a farm and cotton area; inc. 1873. It is a trade and industrial center. Conway was settled (c.1865) near the site of a French trading post (c.1770). III. "We continue to be rewarded for our willingness to invest in additional capacity at a time when others were cutting back. Growing demand for four-color textbooks helped keep our new press fully utilized, and sales trends were also positive in our other markets. In our publishing segment, the addition of REA enabled us to record double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. sales growth, though Dover Dover, town, England Dover (dō`vər), town (1991 pop. 33,461), Kent, SE England, on the Strait of Dover, beneath chalk cliffs (the "White Cliffs of Dover") c.375 ft (114 m) high. The small Dour River flows through the town. sales were up only modestly. At the same time, we are confident that recent investments in marketing and customer service, coupled with several key hires in management during the quarter, will lead to improved growth at Dover as the year progresses." Book manufacturing sales up in all three markets Courier's book manufacturing segment had first-quarter sales of $42.9 million, up 8% from last year's first quarter. Pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. for the segment rose 15% in the quarter to $5.6 million or $.43 per diluted share, versus $4.8 million or $.39 per diluted share in 2004. Gross profit in the segment rose 5% to $11.9 million, but decreased as a percentage of sales to 27.8% from 28.6% in 2004, reflecting the effects of selectively lowered pricing tied to market share increases. The book manufacturing segment focuses on three publishing markets: education, religion, and specialty trade. Sales to the education market rose 9% in the quarter, with gains in all categories from elementary elementary /el·e·men·ta·ry/ (el?e-men´tah-re) not resolvable or divisible into simpler parts or components. elementary not resolvable into simpler parts. elementary body 1. and high school to college. Sales to the religious market were up 6%, resulting in twelve-month growth of 4%, in line with expectations. Sales to the specialty trade market were up 7% from a weak quarter in fiscal 2004, reflecting continued gradual The Gradual (Latin: graduale, sometimes called the Grail) is a chant in the extraordinary form of the Roman Catholic Mass, sung after the reading or singing of the Epistle and before the Alleluia, or, during penitential seasons, before the Tract. improvement in this diverse market. "While textbook sales fueled much of the segment's growth this quarter, we also did well in our other markets," said Mr. Conway. "In addition, our new press continued to perform ahead of expectations while receiving enthusiastic support from an increasingly diverse range of customers. We continued to invest in training, using the resulting productivity gains to help offset the effects of pricing pressure on the segment's gross profit percentage. And as we look forward to an extended period of growth in the education market, we are on schedule with our plans to add another new four-color press late in 2005." REA drives gains in publishing sales Courier's specialty publishing segment includes two businesses: Research & Education Association (REA), a publisher of test preparation books and study guides, and Dover Publications, which publishes thousands of titles spanning a broad range of niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. . Overall, the segment reported first-quarter sales of $10.3 million, up 13% from $9.1 million in last year's first quarter, with $1.1 million of the increase coming from the inclusion of REA sales. The segment's pretax income was $1.1 million or $.08 per diluted share for the quarter, down from $1.3 million or $.10 per diluted share in fiscal 2004. Gross profit was up 12%, but down slightly as a percentage of sales, to 47.9% from 48.6% a year ago, reflecting the effects of required opening inventory writeup writeup An accounting increase in the book value of an asset without an accompanying expenditure of funds. For example, if a firm accounts for inventory on the basis of market value, the firm may need a writeup of inventory during a period of price inflation. at REA. First-quarter sales at REA were $1.1 million, reflecting an off season in a business that typically peaks in relation to examination periods. At Dover, first-quarter sales were $9.1 million, up 1% from a year earlier. Sales to major bookstore chains and direct-to-consumer sales were both up 8%, but these increases were offset by weaker-than-expected sales to non-bookstore customers such as gift shops and crafts stores. Dover pretax income was $1.1 million, down from $1.3 million from fiscal 2004, as the company invested in a series of management, marketing and technology initiatives designed to foster stronger growth in coming quarters. Nonetheless, gross profit as a percentage of sales rose to 49.1% from 48.6% a year earlier, reflecting a more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. sales mix sales mix See product mix. as well as modest price increases. "Excellent products and continued success in marketing to consumers were not enough to bring Dover's sales growth up to expectations," said Mr. Conway. "The good news is that we have responded to the situation in a comprehensive way that included two key management additions. We have also begun a restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of Dover's warehousing operations that will improve both customer service and operating efficiency. In addition, Dover and REA have begun working together on the development of a common technological infrastructure which should lead to further improvements in customer service and marketing as well as production. These latter steps reduced profitability in the quarter by about $100,000 and are anticipated to be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $600,000 over the year as a whole, but we expect to generate annual savings in excess of $800,000 in fiscal 2006 and beyond. With a stronger product lineup A criminal investigation technique in which the police arrange a number of individuals in a row before a witness to a crime and ask the witness to identify which, if any, of the individuals committed the crime. than ever in both businesses, we believe we are putting the pieces in place for solid revenue and earnings growth throughout the segment." Outlook "We are confident that we have entered into an extended period of growth in book manufacturing, and we are ready to take full advantage of it," said Mr. Conway. "At the same time, we are building on a strong foundation in specialty publishing and are positioning ourselves for sustained profitable growth in that segment as well. We are excited by the advance indications of a strong spring and summer season, and as in past years, we expect the largest part of our 2005 growth to occur in the second half of our fiscal year. "For fiscal 2005 overall, we are maintaining our earlier guidance indicating sales growth of 7% to 9%, resulting in total sales of between $226 and $231 million-- which would be a record high for Courier. And we also continue to expect earnings per diluted share in the range of $2.75 to $2.90. This range represents an increase of between 10% and 16% from fiscal 2004 earnings of $2.50 per diluted share, and would also set a new company record. This guidance excludes the impact of newly adopted stock option accounting rules, which will become effective in our fourth quarter and are expected to reduce this year's earnings by approximately $0.11 per diluted share." About Courier Corporation Courier Corporation prints, publishes and sells books. Headquartered in North Chelmsford, Massachusetts North Chelmsford is a part of the U.S. town of Chelmsford, Massachusetts. Although North Chelmsford has its own zip code, library, post office, police station, fire station, and local calling area, it is run by the same local town government and is part of the same school district , Courier has two business segments, full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. book manufacturing and specialty book publishing. For more information, visit www.courier.com. This news release includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Statements that describe future expectations, plans or strategies are considered "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 and releases issued by the Securities and Exchange Commission. The words "believe," "expect," "anticipate," "intend," "estimate" and other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters identify forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Factors that could affect actual results include, among others, changes in customers' demand for the Company's products, including seasonal changes in customer orders, changes in raw material costs, pricing actions by competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. , consolidation among customers and competitors, success in the integration of acquired businesses, unanticipated changes in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , changes in technology, difficulties in the start up of new equipment, changes in copyright laws, changes in tax regulations, and general changes in economic conditions, including currency fluctuations and changes in interest rates. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements will prove to be accurate. The forward-looking statements included herein are made as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and the Company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or .
COURIER CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share amounts)
FIRST QUARTER ENDED
------------------------------
December 25, December 27,
2004 2003
---------------- -------------
Net sales $51,269 $46,819
Cost of sales 34,569 31,190
---------------- -------------
Gross profit 16,700 15,629
Selling and administrative expenses 10,283 9,638
Interest income, net (27) (27)
---------------- -------------
Income before taxes 6,444 6,018
Provision for income taxes 2,313 2,106
---------------- -------------
Net income $4,131 $3,912
================ =============
Net income per diluted share $0.50 $0.48
================ =============
Cash dividends declared per share $0.10 $0.0875
================ =============
Wtd. average diluted shares outstanding 8,290 8,189
SEGMENT INFORMATION:
Net sales:
----------------------------------------
Book Manufacturing $42,923 $39,657
Specialty Publishing 10,270 9,067
Intersegment sales (1,924) (1,905)
---------------- -------------
Total $51,269 $46,819
Income before taxes:
----------------------------------------
Book Manufacturing $5,555 $4,823
Specialty Publishing 1,061 1,313
Intersegment profit and other (172) (118)
---------------- -------------
Total $6,444 $6,018
Net income per diluted share:
----------------------------------------
Book Manufacturing $0.43 $0.39
Specialty Publishing 0.08 0.10
Intersegment profit and other (0.01) (0.01)
---------------- -------------
Total $0.50 $0.48
COURIER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
December 25, September 25,
ASSETS 2004 2004
------ -------------- -------------
Current assets:
Cash and cash equivalents $22,886 $23,965
Accounts receivable 28,679 34,072
Inventories 25,929 25,108
Deferred income taxes 2,849 2,852
Other current assets 804 840
-------------- -------------
Total current assets 81,147 86,837
Property, plant and equipment, net 52,383 48,482
Goodwill 33,255 33,255
Prepublication costs 5,168 5,127
Other assets 1,510 1,498
-------------- -------------
Total assets $173,463 $175,199
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
-----------------------------------------
Current liabilities:
Current maturities of long-term debt $83 $83
Accounts payable 6,608 10,059
Accrued taxes 4,385 5,557
Other current liabilities 12,305 13,664
-------------- -------------
Total current liabilities 23,381 29,363
Long-term debt 490 510
Deferred income taxes 7,701 7,706
Other liabilities 2,742 2,630
-------------- -------------
Total liabilities 34,314 40,209
-------------- -------------
Total stockholders' equity 139,149 134,990
-------------- -------------
Total liabilities and
stockholders' equity $173,463 $175,199
============== =============
COURIER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
For the Three Months Ended
--------------------------
December 25, December 27,
2004 2003
------------ -------------
Operating Activities:
Net income $4,131 $3,912
Adjustments to reconcile net income to
cash provided from operating activities:
Depreciation and amortization 2,966 2,590
Deferred income taxes (2) 536
Changes in working capital (1,374) (2,878)
Tax benefits of stock option activity 241 384
Other, net 121 196
------------ -------------
Cash provided from operating activities 6,083 4,740
------------ -------------
Investment Activities:
Capital expenditures (6,224) (4,481)
Prepublication costs (680) (563)
------------ -------------
Cash used for investment activities (6,904) (5,044)
------------ -------------
Financing Activities:
Repayments of debt, net (20) (20)
Cash dividends (804) (704)
Proceeds from stock plans 566 42
------------ -------------
Cash used for financing activities (258) (682)
------------ -------------
Decrease in cash and cash equivalents (1,079) (986)
Cash and cash equivalents at the beginning
of the period 23,965 23,824
------------ -------------
Cash and cash equivalents at the end of the
period $22,886 $22,838
============ =============
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