Courier Corporation Reports Record Second Quarter; Earnings from Continuing Operations up 32% 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)--April 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 publishers, today announced record earnings for the quarter ended March 29, 2003, the second 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 $3.8 million, or $.70 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 32% over corresponding second-quarter results in the prior year of $2.9 million, or $.54 per diluted share. Sales from continuing operations were $48.6 million for the quarter, up 1% from second-quarter sales of $48.1 million in fiscal 2002. For the first six months of Courier's 2003 fiscal year, earnings from continuing operations were up 35% to $7.5 million or $1.40 per diluted share, from $5.6 million or $1.06 per diluted share for the first half of fiscal 2002. Six-month sales were $97.4 million, up 4% from the first half 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. . "The second quarter of fiscal 2003 once again found us on track and benefiting from renewed 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. signs of life in several of our book manufacturing markets," 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. "While market growth remained uneven, we made the most of our opportunities and were able to exceed consensus earnings estimates for the quarter. In book manufacturing, we were particularly pleased to see double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. year-over-year sales growth in specialty trade, which had been our hardest-hit market during the downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. . Meanwhile, our specialty publishing segment achieved excellent performance in direct-to-consumer sales at 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 and recorded a 32% increase 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. . "On a company-wide level, we continued to grow stronger both financially and organizationally. Our gross profit percentage rose over last year to 32% for both the second quarter and the first six months of the fiscal year. We continued to improve on our already excellent financial condition, finishing the quarter with $13 million in cash, up $7.3 million so far this year. And we strengthened our Board of Directors with the addition of Ronald L. Skates Skates may refer to:
Results by segment Book manufacturing sales for the second quarter of fiscal 2003 were $41.1 million, an increase of 2% over last year's second quarter. Second-quarter pretax income for the segment was $4.7 million, up 30% from a year earlier. For the first six months of fiscal 2003, book manufacturing sales were up 5%, and pretax income was up 39%. As a book manufacturer, Courier serves publishers in three markets: religious, education and specialty trade. Sales to the religious market were off 6% in the second quarter, but up 4% for the first six months, in line with previous projections. Sales to the education market were up 6% for the second quarter and 9% for the fiscal year to date. 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 20% for the quarter and 17% for the first six months of fiscal 2003, reflecting renewed demand for reprints of college texts following the previous year's inventory reductions. In the elementary/high school market, sales were off 20% from fiscal 2002's second quarter, and down 10% for the first six months, reflecting a lighter schedule of state textbook textbook Informatics A treatise on a particular subject. See Bible. adoptions and tight state budgets this year. Sales to the specialty trade market were up 11% over fiscal 2002 for the second quarter, and 9% on a year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. basis. Many segments of the specialty trade market showed renewed strength. Healthy demand for game books for Playstation A video game console from Sony that was introduced in the U.S. in 1995. CD-ROM based and using a 32-bit MIPS CPU, the original PlayStation was the first of a family of desktop and handheld units. (R) 2 and other platforms offset slow sales of books on computers and technology, which were hampered by the continuing slump Slump A temporary fall in performance, often describing consistently falling security prices for several weeks or months. in the technology sector of the economy. "There were several significant stories in book manufacturing this quarter," said Conway. "Externally, we had an improving picture among specialty trade publishers, plus a growing 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. production for educational books. Internally, we continued to press forward with innovations in process management and increases in plant productivity, which enabled us to deliver outstanding service. All these factors contributed to an increase in our gross profit percentage in book manufacturing, which is now up 250 basis points for the year, to 28%." Dover 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 32% over fiscal 2002's second-quarter figure of $0.9 million. Sales for the quarter were $9.1 million, up 3% from last year's second quarter and $17.4 million in the first half of the year, equal to last year's comparable period. Direct-to-consumer sales, which comprise approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 14% of Dover's total sales were up 34% for the second quarter and 22% for the first six months of fiscal 2003. These gains were offset by mixed results from retailers, with sales down at large bookstore chains but up at craft stores, gift shops and other non-bookstore retailers. "Dover's increasingly effective direct marketing to consumers provided the spark spark, in electricity: see arc. (language) SPARK - An annotated subset of Ada supported by tools supplied by Praxis Critical Systems (originally by PVL). http://sparkada.com. that enabled it to post impressive results during the quarter," said Mr. Conway. "Innovative catalogs, better list management, and new e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. capabilities helped drive significant direct-to-consumer sales gains and steadily expand our customer universe. Online consumer sales in particular were up 46% for the first six months of fiscal 2003. We also took significant steps to enhance our support for trade customers, with the result that our SalesPartner electronic direct marketing program grew to more than 2,000 members. Finally, through declining product costs related to the sale of inventory from the original acquisition and a healthy direct sales mix sales mix See product mix. , we succeeded in ratcheting up Dover's gross margins in the quarter by 200 basis points." Outlook "With two very good quarters in hand, we are confident that we will reach our earnings goals for the year," said Mr. Conway. "In fact, because our second quarter outperformed expectations, we are raising our earnings guidance for fiscal 2003 by $.05 per diluted share. We look forward to 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. recovery in the economy in general and in book manufacturing in particular. We are still investing in equipment to meet renewed demand while working hard to maximize our operating efficiency. In specialty publishing, we are capitalizing on our direct customer channels while expanding our base among retailers and working closely with them to identify new opportunities. Dover is stronger than ever both editorially and in marketing, and we are as excited as ever about its long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. prospects. "For fiscal year 2003 as a whole, we expect Courier's sales from continuing operations to be in the range of $208 to $213 million, representing an increase of approximately 4% to 6% over comparable fiscal 2002 sales. And after increasing our guidance by $.05 per diluted share, we now expect earnings per diluted share from continuing operations to be in the range of $3.45 to $3.60, up approximately 13% to 18% from last year's comparable earnings of $3.06 per diluted share. In the face of war overseas and an uncertain domestic economy, we are proud of our accomplishments to date, and delighted to be on track for Courier's seventh consecutive year of double-digit earnings growth," Conway concluded. About Courier Corporation Courier Corporation prints, publishes and sells books. Headquartered in North Chelmsford, MA, 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 second 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 646-862-1152 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 number: 21131657), 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, 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 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)
QUARTER ENDED SIX MONTHS ENDED
March 29, March 30, March 29, March 30,
2003 2002 2003 2002
Net sales $48,605 $48,102 $97,387 $93,716
Cost of sales 33,019 33,975 66,413 66,242
Gross profit 15,586 14,127 30,974 27,474
Selling and administrative
expenses 9,788 9,612 19,486 18,734
Interest expense 26 163 68 313
Income before taxes 5,772 4,352 11,420 8,427
Provision for income taxes 1,984 1,474 3,883 2,834
Income from continuing
operations $3,788 $2,878 $7,537 $5,593
Discontinued operations:
Income (loss) from
operations, net of tax - (13) (65) (107)
Gain on disposal, net
of tax 33 - 861 -
Net Income $3,821 $2,865 $8,333 $5,486
Income per diluted share
from:
Continuing operations $0.70 $0.54 $1.40 $1.06
Discontinued operations:
Income (loss) from
operations - - (0.01) (0.02)
Gain on disposal 0.01 - 0.16 -
Net income per diluted
share $0.71 $0.54 $1.55 $1.04
Cash dividends declared per
share $0.1125 $0.10 $0.2250 $0.20
Weighted average shares
outstanding:
Basic 5,223,000 5,134,000 5,219,000 5,125,000
Diluted 5,404,000 5,323,000 5,393,000 5,299,000
SEGMENT INFORMATION:
Net sales:
Book Manufacturing $41,127 $40,500 $82,967 $78,777
Specialty Publishing 9,077 8,854 17,442 17,398
Intersegment sales (1,599) (1,252) (3,022) (2,459)
Total for continuing
operations $48,605 $48,102 $97,387 $93,716
Earnings (loss) before
income taxes:
Book Manufacturing $4,714 $3,635 $9,428 $6,780
Specialty Publishing 1,188 901 2,249 1,809
Intersegment profit and
other (130) (184) (257) (162)
Total for continuing
operations $5,772 $4,352 $11,420 $8,427
Net income (loss) per
diluted share:
Book Manufacturing $0.58 $0.46 $1.17 $0.87
Specialty Publishing 0.14 0.10 0.26 0.21
Intersegment profit and
other (0.02) (0.02) (0.03) (0.02)
Total for continuing
operations $0.70 $0.54 $1.40 $1.06
COURIER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
March 29, September 28,
ASSETS 2003 2002
Current assets:
Cash and cash equivalents $12,934 $5,630
Accounts receivable 28,862 30,892
Inventories 21,725 21,412
Deferred income taxes 3,154 3,163
Other current assets 471 625
Total current assets 67,146 61,722
Property, plant and equipment, net 38,741 40,620
Goodwill and other intangibles, net 24,944 24,952
Prepublication costs 3,517 3,219
Other assets 1,156 1,145
Total assets $135,504 $131,658
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $78 $78
Accounts payable 7,174 6,708
Accrued taxes 4,418 6,965
Other current liabilities 11,667 14,004
Total current liabilities 23,337 27,755
Long-term debt 635 674
Deferred income taxes 5,175 4,658
Other liabilities 2,370 2,652
Total liabilities 31,517 35,739
Total stockholders' equity 103,987 95,919
Total liabilities and
stockholders' equity $135,504 $131,658
COURIER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
For the Six Months Ended
March 29, March 30,
2003 2002
Operating Activities:
Net income $8,333 $5,486
Adjustments to reconcile net income to
cash provided from operating activities:
Depreciation and amortization 5,057 5,565
Deferred income taxes 526 253
Changes in working capital (2,581) (469)
Gain on sale of discontinued operation (861) -
Other, net (350) 222
Cash provided from operating activities 10,124 11,057
Investment Activities:
Capital expenditures (2,373) (2,333)
Prepublication costs (1,107) (841)
Proceeds from sale of assets 1,500 -
Cash used for investment activities (1,980) (3,174)
Financing Activities:
Repayments of debt, net (39) (7,538)
Cash dividends (1,174) (1,024)
Proceeds from stock plans 373 547
Cash used for financing activities (840) (8,015)
Increase (decrease) in cash and cash
equivalents 7,304 (132)
Cash and cash equivalents at the beginning
of the period 5,630 173
Cash and cash equivalents at the end of the
period $12,934 $41
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