Courier Corporation Reports Record Earnings; Third-Quarter and Nine-Month Results up 15% and 26% Over Prior Year.Business Editors 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.--(BUSINESS WIRE)--July 17, 2003 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 the best third-quarter and nine-month earnings results in its history. For the period ending June June: see month. 28, 2003, the third quarter of the company's 2003 fiscal year, Courier reported income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $4.8 million, or $.88 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 15% over corresponding third-quarter results in the prior year of $4.1 million, or $.77 per diluted share. Sales from continuing operations were $51.1 million for the quarter, off 1% from third-quarter sales of $51.7 million in fiscal 2002. For the first nine months of Courier's 2003 fiscal year, earnings from continuing operations were up 26% to a record $12.3 million or $2.28 per diluted share, from $9.7 million or $1.83 per diluted share for the first nine months of fiscal 2002. Nine-month sales were $148.5 million, up 2% from the first nine months of fiscal 2002. These figures do not include results from Courier Custom Publishing, which was sold by Courier in December December: see month. 2002 and has since been accounted for as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. . "Our third-quarter results demonstrate our continuing ability to boost productivity and profitability in a tight economy," 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. "In book manufacturing, we overcame an adverse sales environment to post double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. increases in 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. and earnings per share. Our specialty publishing segment had an even better quarter, turning modest 5% sales growth into increases of 34% in pretax income and 27% in earnings per share. At the same time, we continued to benefit from conservative financial management, finishing the quarter with $20 million in cash, an increase of $7 million during the quarter and $14.4 million year to date." Results by segment Courier's book manufacturing segment reported third-quarter pretax income of $6.3 million, up 16% from a year earlier. Book manufacturing sales for the quarter were $43.6 million, down 2.5% from fiscal 2002's third quarter. For the first nine months of fiscal 2003, book manufacturing pretax income was up 29%, while sales were up 2.5%. As a book manufacturer, Courier serves publishers in three markets: education, religious and specialty trade. Sales to the education market were up 5% for the third quarter and 8% for the fiscal year to date, as Courier continued to increase its share of that market. Sales in higher education higher education Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art. (which represents the majority of Courier's education sales) were up 22% for the quarter and 19% for the first nine months of fiscal 2003, reflecting strong growth in demand for 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. textbooks, increasingly a Courier specialty. In the elementary/high school market, sales were down 13% for the third quarter and 12% year to date, with many states delaying new textbook textbook Informatics A treatise on a particular subject. See Bible. purchases because of budget deficits. Sales to the religious market were down 10% in the third quarter, and 1% for the first nine months of the fiscal year. In 2003, sales of religious trade books suffered from reductions in the number of new titles released as publishers worked to control costs in the slow economy. Sales to the specialty trade market were up 14% in the third quarter, and up 10% year to date, bouncing back from depressed Depressed A description of a market, security, or product that is experiencing weak demand and lowering prices. Notes: A depressed market, security, or product implies that prices and volume are low. There are many reasons for a depressed market, security, or product. sales in fiscal 2002 as booksellers began renewing re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. depleted de·plete tr.v. de·plet·ed, de·plet·ing, de·pletes To decrease the fullness of; use up or empty out. [Latin d inventories. Sales were also helped by market share gains and continued rising demand for game books. "Our book manufacturing business has continued to excel in difficult 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 ," said Mr. Conway. "With economic uncertainty compounded by the war in Iraq Iraq or Irak (both: ēräk`, ĭrăk`), officially Republic of Iraq, republic (2005 est. pop. 26,075,000), 167,924 sq mi (434,924 sq km), SW Asia. , sales were under pressure throughout the quarter. There was good news in June, as retail book sales rose sharply, boding bod·ing n. An omen or foreboding, especially of evil. Noun 1. boding - a feeling of evil to come; "a steadily escalating sense of foreboding"; "the lawyer had a presentiment that the judge would dismiss the case" well for the remainder of the year. But for the most part, we had to make our own good news through hard work and improved efficiency. We succeeded in growing our gross profit percentage in book manufacturing by 290 basis points to 29.5% for the third quarter, and by 260 basis points to 28.5% year to date. This performance reflects the continued investments in equipment and training that have enabled us to offer outstanding service to customers while steadily increasing efficiency." 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. Publications, 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, reported pretax income of $1.2 million for the quarter, an increase of 34% over fiscal 2002's third-quarter figure of $0.9 million. Sales for the quarter were $8.9 million, up 5% from $8.5 million in last year's third quarter. Much of the gain came from increased sales to large bookstore chains, which had been down earlier in the year, as well as a 46% increase in international sales. Other recent accomplishments included the introduction of several new product lines for fall distribution and the launch of DoverDirect.co.uk and SalesPartner-UK, a new business-to-business  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. website and trade marketing program targeting British retailers. "Dover pushed hard in the face of the slow economy, achieving dramatic improvements in operating efficiency while laying the groundwork for greater growth as the economy improves," said Mr. Conway. "An example is SalesPartner-UK, an electronic direct marketing program launched in cooperation with our U.K. distributor and representing a first in the publishing industry. We believe this program will not only strengthen demand in the U.K., but also provide a model for use in other markets. "We also continue to be pleased by Dover's increasing profitability. The segment's gross margin percentage rose by 410 basis points to 47.2% for the quarter, thanks to a combination of price increases, operating efficiencies and declining product costs related to the sale of inventory from the original acquisition. Year to date, Dover's gross profit percentage is up by 310 basis points to 46.3%." Outlook "Three-quarters Noun 1. three-quarters - three of four equal parts; "three-fourths of a pound" three-fourths common fraction, simple fraction - the quotient of two integers three-quarters npl → of the way through fiscal 2003, we remain confident that we will reach our earnings goals for the year," said Mr. Conway. "We anticipate a busy season in the education market, as states have begun releasing funds to support new textbook purchases. The outlook in specialty trade is also hopeful, with book retailers benefiting from the summer of 'Harry and Hillary.' Dover continues to find new ways to exploit specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. opportunities and strengthen its connection to readers, both domestically and internationally. And we continue to invest in state-of-the-art equipment, with emphasis on four-color production, where our demand has been strongest. In fact, we have recently purchased a new ultra-high capacity four-color press, to be installed next spring in time for the 2004 textbook season. "For fiscal year 2003 as a whole, we expect Courier's sales from continuing operations to be in the range of $205 to $208 million, compared to $201 million last year. We expect earnings per diluted share from continuing operations to be in the range of $3.50 to $3.60, up approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 14% to 18% from last year's comparable earnings of $3.06 per diluted share. Given today's economic environment, we are excited at the prospect of completing yet another year of double-digit earnings growth." About Courier Corporation Courier Corporation prints, publishes and sells books. Headquartered in North Chelmsford, Mass., Courier has two lines of business: 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. Courier Corporation will host a third-quarter conference call today at 2:30 p.m. ET regarding issues discussed in this news release. The conference call will be available via telephone at 212-346-6390 and accessible via webcast on Courier Corporation's investor relations Investor relations The process by which the corporation communicates with its investors. home page, at www.courier.com. Recorded replays of the conference call will be available on Courier's web site and by telephone at 800-633-8284 (reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number: 21154066), beginning at 4:30 p.m. ET today. Forward-Looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. Information Statements that describe future expectations, plans or strategies are considered "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. " 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, changes in copyright laws, changes in tax policy including export credits, and general changes in economic conditions. 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.
COURIER CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share amounts)
QUARTER ENDED NINE MONTHS ENDED
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
Net sales $51,076 $51,668 $148,463 $145,384
Cost of sales 34,114 36,256 100,527 102,498
Gross profit 16,962 15,412 47,936 42,886
Selling and administrative
expenses 9,578 9,154 29,064 27,888
Interest expense (2) 86 66 399
Income before taxes 7,386 6,172 18,806 14,599
Provision for income taxes 2,614 2,026 6,497 4,860
Income from continuing
operations $4,772 $4,146 $12,309 $9,739
Discontinued operations:
Loss from operations,
net of tax - (66) (65) (173)
Gain on disposal, net
of tax - - 861 -
Net Income $4,772 $4,080 $13,105 $9,566
Income per diluted share from:
Continuing operations $0.88 $0.77 $2.28 $1.83
Discontinued operations:
Loss from operations - (0.01) (0.01) (0.03)
Gain on disposal - - 0.16 -
Net income per diluted
share $0.88 $0.76 $2.43 $1.80
Cash dividends declared per
share $0.1125 $0.10 $0.3375 $0.30
Weighted average shares
outstanding:
Basic 5,237,000 5,161,000 5,225,000 5,137,000
Diluted 5,423,000 5,356,000 5,404,000 5,320,000
SEGMENT INFORMATION:
Net sales:
Book Manufacturing $43,561 $44,699 $126,528 $123,476
Specialty Publishing 8,948 8,487 26,390 25,885
Intersegment sales (1,433) (1,518) (4,455) (3,977)
Total for continuing
operations $51,076 $51,668 $148,463 $145,384
Earnings (loss) before
income taxes:
Book Manufacturing $6,294 $5,411 $15,722 $12,191
Specialty Publishing 1,208 904 3,457 2,713
Intersegment profit and
other (116) (143) (373) (305)
Total for continuing
operations $7,386 $6,172 $18,806 $14,599
Net income (loss) per
diluted share:
Book Manufacturing $0.75 $0.68 $1.92 $1.55
Specialty Publishing 0.14 0.11 0.40 0.32
Intersegment profit and
other (0.01) (0.02) (0.04) (0.04)
Total for continuing
operations $0.88 $0.77 $2.28 $1.83
COURIER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
June 28, September 28,
ASSETS 2003 2002
Current assets:
Cash and cash equivalents $20,054 $5,630
Accounts receivable 28,750 30,892
Inventories 21,469 21,412
Deferred income taxes 3,069 3,163
Other current assets 882 625
Total current assets 74,224 61,722
Property, plant and equipment, net 38,449 40,620
Goodwill and other intangibles, net 24,940 24,952
Prepublication costs 3,658 3,219
Other assets 1,299 1,145
Total assets $142,570 $131,658
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $78 $78
Accounts payable 6,767 6,708
Accrued taxes 4,538 6,965
Other current liabilities 14,286 14,004
Total current liabilities 25,669 27,755
Long-term debt 615 674
Deferred income taxes 5,452 4,658
Other liabilities 2,551 2,652
Total liabilities 34,287 35,739
Total stockholders' equity 108,283 95,919
Total liabilities and
stockholders' equity $142,570 $131,658
COURIER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
For the Nine Months Ended
June 28, June 29,
2003 2002
Operating Activities:
Net income $13,105 $9,566
Adjustments to reconcile net income to
cash provided from operating activities:
Depreciation and amortization 7,431 8,289
Deferred income taxes 888 1,399
Changes in working capital (292) 1,536
Gain on sale of discontinued operation (861) -
Other, net (270) 371
Cash provided from operating activities 20,001 21,161
Investment Activities:
Capital expenditures (4,048) (3,887)
Prepublication costs (1,653) (1,282)
Proceeds from sale of assets 1,500 -
Cash used for investment activities (4,201) (5,169)
Financing Activities:
Repayments of debt, net (59) (15,307)
Cash dividends (1,763) (1,541)
Proceeds from stock plans 446 738
Cash used for financing activities (1,376) (16,110)
Increase (decrease) in cash and cash
equivalents 14,424 (118)
Cash and cash equivalents at the beginning of
the period 5,630 173
Cash and cash equivalents at the end of the
period $20,054 $55
The accompanying notes are an integral part of the consolidated
financial statements.
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