Courier Corporation Reports Second Quarter Results; Continuing Operations Yield Sales of $50 Million, Income of $.47 Per Share.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 15, 2004 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 results for the quarter ending March 27, 2004, the second quarter of the company's 2004 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 $3.9 million, or $.47 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, substantially similar to the corresponding second-quarter results of $3.8 million or $.47 per diluted share last year. Sales from continuing operations were $49.7 million for the quarter, up 2% from second-quarter sales of $48.6 million in fiscal 2003. For the first six months of Courier's 2004 fiscal year, income from continuing operations was $7.8 million or $.95 per diluted share, up 3% from $7.5 million or $.93 per diluted share for the first half of fiscal 2003. Six-month sales for fiscal 2004 were $96.5 million, off 1% from $97.4 million in the first half of last year. Both the second-quarter and six-month results include results 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) ) for the period since January January: see month. 6, 2004, the date Courier acquired REA. Results from Courier Custom Publishing, which was sold by Courier in December December: see month. 2002, were 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. in fiscal 2003 and had no impact in fiscal 2004. "We worked hard throughout this quarter to overcome a slow January," 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 we fell a bit short of our second-quarter targets, we were rewarded by a steady increase in orders, ending the quarter with healthy press loads indicating a stronger second half of the year. During the quarter, we gained market share with several book manufacturing customers, successfully integrated REA's operations into our specialty publishing segment, and made excellent progress in the installation of a major new 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. press at our Kendallville, Indiana Kendallville is a city in Noble County, Indiana, United States. The population was 9,616 at the 2000 census. Geography Kendallville is located at (41.441750, -85.260475)GR1. plant. As expected, startup (STARTing UP) "At startup" means when the computer is first turned on or when a program is first loaded. See Startup folder. costs for the press of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $150,000 reduced our second-quarter earnings, but the press is now in operation, ahead of schedule and in time for the higher volumes we expect in the third and fourth quarters." Results by segment Book manufacturing sales for the second quarter of fiscal 2004 were $41.0 million, comparable to last year's second quarter. Second-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 was $4.9 million, up 4% from a year earlier. For the first six months of fiscal 2004, book manufacturing sales were down 3% from fiscal 2003, while pretax income was up 3%. As a book manufacturer, Courier serves publishers in three markets: religious, education and specialty trade. Sales to the religious market were up 2% over both the second quarter and first six months of last year, helped by stronger religious trade sales in keeping with longer-term market trends. Sales to the education market were up 14% for the second quarter and 6% for the first half of the fiscal year. Sales to the elementary/high school market were particularly strong in the quarter, primarily as a result of gains in market share. Sales to the specialty trade market were down 20% from a strong second quarter in fiscal 2003, and off 14% through six months. One cause of the decline was slow sales of computer game books as a result of the maturing of current game platforms and the absence of new "blockbuster block·bust·er n. 1. Something, such as a film or book, that sustains widespread popularity and achieves enormous sales. 2. A high-explosive bomb used for demolition purposes. 3. " games. In addition, reprint reprint An individually bound copy of an article in a journal or science communication orders were very slow as the quarter began, but picked up as it progressed. "Strong education sales were a highlight of the second quarter in our book manufacturing segment," said Mr. Conway. "In a tough competitive environment, we gained significant share in the elementary and high school market. Our slower trade sales reflected cautious ordering by publishers as well as cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. factors in the market for game books. Fortunately, we continued to improve our production efficiency, partially offsetting the impact of uncertainty in the market and related pricing pressure. And we continued to deliver outstanding service to our customers even as the pace of orders accelerated toward the end of the quarter. The combination of pricing, product mix, and start up costs related to our new press caused gross margin in the segment to decline from 28.2% to 26.8% of sales. But the press's arrival and successful installation bodes well for our ability to keep up with the higher volumes we foresee fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. in the second half, and to deliver these higher volumes with greater efficiency than ever." With the acquisition of Research & Education Association (REA) on January 6, Courier's specialty publishing segment includes two businesses: REA and 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. Overall, the segment reported second-quarter sales of $10.1 million, up 12% from $9.1 million in last year's second quarter, with the increase attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to sales at REA. The segment's pretax income was $1.1 million for the quarter, a decline of 10% from fiscal 2003's second-quarter figure of $1.2 million. These mixed results reflect cautious ordering by major bookstore chains served by Dover Publications, as well as timing issues related to Dover's direct marketing program. Sales to retailers, which account for 70% of all Dover sales, were down 4% in the quarter, with bookstore chains down 11%. At the same time, sales to crafts stores and other nontraditional Adj. 1. nontraditional - not conforming to or in accord with tradition; "nontraditional designs"; "nontraditional practices" untraditional traditional - consisting of or derived from tradition; "traditional history"; "traditional morality" outlets, while generally strong, were off against fiscal 2003 due to a large special order received in last year's second quarter. Dover direct-to-consumer sales grew by 8% over an outstanding quarter last year, while international sales were up 13% for the second quarter and 21% for the fiscal year to date. REA had second-quarter sales of $1.1 million and was neutral to income, in line with expectations. "The major news in our specialty publishing segment this quarter was our completion of the acquisition of Research & Education Association (REA), a publisher of highly regarded study guide books and software for users ranging from high school students to professionals in a variety of fields," said Mr. Conway. "REA's integration into Courier progressed smoothly, and we believe it extends the segment's capabilities in valuable ways. This spring REA became the first publisher to offer a study guide for the new SAT scheduled to be implemented throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. in 2005. "Dover continued to grow its direct-to-consumer and international business, but faced a challenging quarter in domestic trade, with slower orders from some of the large bookseller chains," continued Mr. Conway. "We have been adjusting our consumer catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. mailing schedule, and we expect that the changes will drive significantly greater direct sales in the second half of the year and should lead to improved bookstore sales as well. We also continued to build our business through non-bookstore channels, where Dover's extraordinary variety of 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. content offers unique value. Overall, we expect Dover to return to double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. sales growth in the third and fourth quarters." Outlook "While our second-quarter results were slightly below plan, we remain confident about reaching our full-year earnings goals," said Mr. Conway. "Trends have grown increasingly positive across virtually all of our operations, and we enter our third quarter with the healthiest order flow in recent memory. With growing share at several accounts and our new press adding to capacity just in time for this year's school textbook textbook Informatics A treatise on a particular subject. See Bible. season, we look forward to substantially improved performance in the second half, with full-year earnings in line with earlier guidance. "For fiscal year 2004 as a whole, we expect Courier's sales from continuing operations to be in the range of $214 to $219 million, representing an increase of 6% to 8% over fiscal 2003 sales. And we expect earnings per diluted share from continuing operations to be in the range of $2.57 to $2.67, up approximately 8% to 13% from last year's comparable earnings of $2.37 per diluted share. By adhering ADHERING. Cleaving to, or joining; as, adhering to the enemies of the United States. 2. The constitution of the United States, art. 3, s 3, defines treason against the United States, to consist only in levying war against them or in adhering to their enemies, to our proven formula of steady gains in internal efficiency, superior market focus and the best customer service in the industry, we believe we have excellent prospects for achieving Courier's eighth consecutive year of 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 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. . For more information, visit www.courier.com. 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 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, 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 27, March 29, March 27, March 29,
2004 2003 2004 2003
Net sales $49,663 $48,605 $96,482 $97,387
Cost of sales 34,136 33,019 65,326 66,413
Gross profit 15,527 15,586 31,156 30,974
Selling and administrative
expenses 9,636 9,788 19,274 19,486
Interest (income) expense (27) 26 (54) 68
Income before taxes 5,918 5,772 11,936 11,420
Provision for income taxes 2,067 1,984 4,173 3,883
Income from continuing
operations $3,851 $3,788 $7,763 $7,537
Discontinued operations,
net of tax - 33 - 796
Net income $3,851 $3,821 $7,763 $8,333
Income per diluted share from:
Continuing operations $0.47 $0.47 $0.95 $0.93
Discontinued operations - - - 0.10
Net income per diluted
share $0.47 $0.47 $0.95 $1.03
Cash dividends declared per
share $0.0875 $0.075 $0.175 $0.15
Wtd. average diluted shares
outstanding 8,229,000 8,106,000 8,210,000 8,090,000
SEGMENT INFORMATION:
Net sales:
Book Manufacturing $40,988 $41,127 $80,645 $82,967
Specialty Publishing 10,124 9,077 19,191 17,442
Intersegment sales (1,449) (1,599) (3,354) (3,022)
Total for continuing
operations $49,663 $48,605 $96,482 $97,387
Income before taxes:
Book Manufacturing $4,907 $4,714 $9,730 $9,428
Specialty Publishing 1,067 1,188 2,380 2,249
Intersegment profit (56) (130) (174) (257)
Total for continuing
operations $5,918 $5,772 $11,936 $11,420
Net income per diluted share:
Book Manufacturing $0.39 $0.39 $0.78 $0.78
Specialty Publishing 0.08 0.09 0.18 0.17
Intersegment profit - (0.01) (0.01) (0.02)
Total for continuing
operations $0.47 $0.47 $0.95 $0.93
Shares outstanding and per share amounts have been retroactively
adjusted to reflect a three-for-two stock split effected on December
5, 2003.
COURIER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
March 27, September 27,
ASSETS 2004 2003
Current assets:
Cash and cash equivalents $8,164 $23,824
Accounts receivable 30,306 29,174
Inventories 24,935 20,681
Deferred income taxes 3,202 3,164
Other current assets 371 830
Total current assets 66,978 77,673
Property, plant and equipment, net 46,739 43,342
Goodwill 33,541 24,847
Prepublication costs 4,928 3,810
Other assets 1,453 1,429
Total assets $153,639 $151,101
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $81 $81
Accounts payable 6,411 6,494
Accrued taxes 3,871 6,521
Other current liabilities 10,680 13,717
Total current liabilities 21,043 26,813
Long-term debt 553 593
Deferred income taxes 6,706 5,597
Other liabilities 2,630 2,678
Total liabilities 30,932 35,681
Total stockholders' equity 122,707 115,420
Total liabilities and stockholders'
equity $153,639 $151,101
COURIER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
For the Six Months Ended
March 27, March 29,
2004 2003
Operating Activities:
Net income $7,763 $8,333
Adjustments to reconcile net income to
cash provided from operating activities:
Depreciation and amortization 5,329 5,057
Deferred income taxes 1,071 526
Changes in working capital (8,550) (2,581)
Gain on sale of discontinued
operation - (861)
Other, net 385 (350)
Cash provided from operating activities 5,998 10,124
Investment Activities:
Capital expenditures (7,580) (2,373)
Prepublication costs (1,249) (1,107)
Business acquisition (11,850) -
Proceeds from sale of assets - 1,500
Cash used for investment activities (20,679) (1,980)
Financing Activities:
Repayments of debt, net (40) (39)
Cash dividends (1,399) (1,174)
Proceeds from stock plans 460 373
Cash used for financing activities (979) (840)
Increase (decrease) in cash and cash
equivalents (15,660) 7,304
Cash and cash equivalents at the
beginning of the period 23,824 5,630
Cash and cash equivalents at the end of
the period $8,164 $12,934
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