Courier Corporation Reports Second Quarter Results; Net Income up 34%.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 18, 2002 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 30, 2002, the second quarter of the company's 2002 fiscal year. Sales for the quarter, at $48.5 million, were off 3% from a year earlier, but net income and earnings 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 were both up sharply, reflecting substantial gains in Courier's 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 subsidiary as well as improved productivity and continued cost controls throughout the company. Second quarter net income was $2.9 million, or $.54 per diluted share, a record level for the company's second fiscal quarter and an increase of 31% from prior year net income of $2.2 million or $.42 per diluted share (adjusted for the adoption of a new accounting pronouncement and a gain on the sale of The Home School - see table below). For the first six months of Courier's 2002 fiscal year, sales were $94.2 million, a decline of 10% from the first half of fiscal 2001. Net income for the first half of fiscal 2002 was $5.5 million or $1.04 per diluted share, up 13% from $4.8 million or $.94 per diluted share for the first half of fiscal 2001 (adjusted for the adoption of a new accounting pronouncement and gains from the sale of The Home School and a real estate sale - see table below).
(dollars in thousands) Second Quarter First Half
Net Income EPS Net Income EPS
Prior year as reported $2,133 $0.41 $5,085 $0.98
Gains from asset sales ($200) ($0.04) ($750) ($0.14)
Goodwill amortization(A) $250 $0.05 $500 $0.10
Adjusted prior year results $2,183 $0.42 $4,835 $0.94
Current year results $2,865 $0.54 $5,486 $1.04
(A) Effective September 30, 2001, the company ceased amortizing
goodwill in connection with the adoption of a new accounting
standard. Goodwill amortization of approximately $250,000 and
$500,000 (net of tax) was recorded in the second quarter and first
half of fiscal 2001, respectively.
"Given the continuing economic challenges that characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. the quarter, I am particularly proud of Courier's achievements in boosting productivity and growing earnings," 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. "I am also pleased that the book manufacturing sales declines of previous quarters have started to ease off, suggesting that we appear to be on track toward a recovery. And I continue to be excited at the performance and prospects of our Dover Publications subsidiary, which is growing both domestically and internationally at double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. rates." Results by segment Book Manufacturing -- Book manufacturing sales for the second quarter of fiscal 2002 were $40.5 million, a decrease of $3.2 million or 7% from a year earlier. The segment serves three primary publishing markets: religious, educational and specialty trade. While sales to the religious market were up 5% from the prior year, sales to the other two markets were down, though the declines were less than in the preceding quarter. Sales to the education market were down 4% from 2001, due primarily to publishers' continuing caution in the face of the sluggish economy Sluggish Economy A state in the economy in which the growth is slow, flat or declining. The term can refer to the economy as a whole or a component of the economy, such as weak housing starts. . Sales to the specialty trade market were down 18% from a year earlier due to similar economic factors, but even this performance represented an improvement over the decline in the preceding quarter. The company continued its aggressive response to these challenging market conditions with a combination of productivity improvements and cost controls. As a result, 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. in the book manufacturing segment was $3.6 million, down less than 2% from a year earlier, and earnings per diluted share were $.46, the same as last year. For the first six months of the fiscal year, book manufacturing sales were $78.8 million, 12% below the first half of fiscal 2001. Pretax income for the first six months was $6.8 million, a decline of 10% from a year earlier. Earnings per diluted share were $.87 for the first six months of fiscal 2002, versus $.95 in same period in fiscal 2001. "Our book manufacturing business has once again proved its mettle met·tle n. 1. Courage and fortitude; spirit: troops who showed their mettle in combat. 2. Inherent quality of character and temperament. in the face of adversity ad·ver·si·ty n. pl. ad·ver·si·ties 1. A state of hardship or affliction; misfortune. 2. A calamitous event. ," said Conway. "While economic signs have begun to point to a turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. , it was still a difficult quarter in education, and even more so in specialty trade. Yet faced with this environment, we more than held our own in terms of market share and our relationships with key customers. At the same time, we were actually able to increase gross profit as a percentage of sales from 24% to 26% compared to the same quarter a year ago -- an achievement which should serve us well as the economy improves." Specialty Publishing -- Courier's specialty publishing segment consists of Dover Publications, a leading provider of proprietary content across a broad range 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. niches including children's books, music scores, art books and scientific texts. Dover second quarter sales of $8.9 million were up 31% over fiscal 2001's second quarter, partly due to a shift in quarterly sales patterns. For the first six months of the year, Dover's sales were $17.4 million, up 13% from the first half of last year. This approximates the year-over-year rise in orders received during the second quarter, and is in line with company expectations and previous guidance for the year. Pretax income in the quarter was approximately $900,000, or $.10 per diluted share, versus a prior year quarterly pretax loss pretax loss A loss reported before tax benefits are considered. of $324,000, or $.04 per diluted share. For the first six months of fiscal 2002, Dover's pretax income was $1.8 million, or $.21 per diluted share, compared to breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations results for the first half of fiscal 2001. "Dover's performance continued to provide excellent news for Courier and an excellent model for the industry," said Conway. "Highlights of Dover's quarter included a 27% rise in international orders, a 19% increase in direct-to-consumer orders, and an increase in gross profit to 48% of sales from 46% a year ago. Also, on March 6th, Dover's web site completed its first year of existence with two million consumer visits, 40,000 orders, 350,000 books sold, and $1.4 million in revenues. This accomplishment not only solidified so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. our strong relationship with Dover readers but also laid the groundwork for our forthcoming launch of a B2B web site See vertical portal. for Dover retailers -- who account for 85% of segment sales and provide some of our most exciting growth opportunities." Customized Education -- Courier's small customized education segment, narrowed its loss from a year earlier, benefiting from the sale of The Home School in March 2001 and improvements this year in the remaining operation, Courier Custom Publishing. For the quarter ended March 30, 2002, the segment was approximately breakeven on a per share basis, versus a loss of $.03 per diluted share in fiscal 2001. Outlook "Despite the recent tough market in education and specialty trade, we have a lot to be thankful thank·ful adj. 1. Aware and appreciative of a benefit; grateful. 2. Expressive of gratitude: a thankful smile. for at the midpoint mid·point n. 1. Mathematics The point of a line segment or curvilinear arc that divides it into two parts of the same length. 2. A position midway between two extremes. of our fiscal year," said Conway. "Our organization is more efficient than ever, our customer relationships are excellent, and the synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. of our book manufacturing and specialty publishing operations is increasingly apparent. Our investments in improved efficiency and customer service have enabled growth in gross margins at a time of reduced capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. . These benefits should increase further in an improving economy, and we are seeing signs that the economic turnaround may finally be on its way. Many of our book manufacturing customers report that they expect a busier summer, with inventories down and consumer demand rising." "Meanwhile, at Dover Publications we are continuing to roll out new programs which we believe will fuel double-digit sales growth and even steeper growth in earnings. New products, additional channels, expanding 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. and an increasing international presence are all part of a growth strategy which has played out according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. plan for the year and a half since our acquisition of Dover in September September: see month. 2000. 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. , I truly believe there is no limit to what we can do with Dover." "Overall, Courier has come through the first half of the year in a manner that increases my confidence about the balance of the year," said Conway. "As the economic recovery unfolds, we will be in a strong position to capture new business and transmit To send data over a communications line. See transfer. an increasing percentage of revenues to the bottom line. Company-wide, we expect sales for the second half to be up 4% to 8% from last year, resulting in full-year sales of $206 to $211 million." "On the earnings front, the outlook is also strong. We have raised our guidance for the full fiscal year to be in the range of $2.80 to $2.90 per diluted share. This compares very favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. with $2.40 per diluted share from last year, which excludes last year's gains of $.14 per diluted share from asset sales. The $2.40 per diluted share includes $.20 of goodwill amortization. If we reach $2.80 to $2.90 per diluted share for fiscal 2002 -- which I am confident we will do -- we will have done more than simply establish a new earnings record for Courier. We will have extended our multi-year string of earnings increases across an entire cycle of industry consolidation and economic fluctuation Fluctuation A price or interest rate change. ." 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 three lines of business: full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. book manufacturing, specialty publishing and customized education. 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 which 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, changes in raw material costs and availability, seasonal changes in customer orders, pricing actions by competitors, changes in copyright laws, consolidation among customers and competitors, success in the integration of acquired businesses, changes in technology, 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 30, March 31, March 30, March 31,
2002 2001 2002 2001
Net sales $ 48,503 $ 49,954 $ 94,207 $ 104,144
Cost of sales 33,977 36,532 66,026 75,997
Gross profit 14,526 13,422 28,181 28,147
Selling and
administrative expenses 10,055 9,501 19,619 19,556
Amortization of goodwill -- 344 -- 692
Interest expense 163 619 313 1,305
Other (income) -- (300) -- (1,230)
Income before taxes 4,308 3,258 8,249 7,824
Provision for
income taxes 1,443 1,125 2,763 2,739
Net income $ 2,865 $ 2,133 $ 5,486 $ 5,085
Net income per share:
Basic(B) $ 0.56 $ 0.42 $ 1.07 $ 1.01
Diluted(B) $ 0.54 $ 0.41 $ 1.04 $ 0.98
Cash dividends
declared per share(B) $ 0.10 $ 0.09 $ 0.20 $ 0.18
Weighted average
shares outstanding:
Basic(B) 5,134,000 5,049,000 5,125,000 5,042,000
Diluted(B) 5,323,000 5,174,000 5,299,000 5,165,000
SEGMENT INFORMATION (Unaudited):
Net Sales:
Book Manufacturing $ 40,500 $ 43,683 $ 78,777 $ 89,803
Customized Education 401 500 491 922
Specialty Publishing 8,854 6,768 17,398 15,337
Intersegment sales (1,252) (997) (2,459) (1,918)
Total $ 48,503 $ 49,954 $ 94,207 $ 104,144
Earning (loss) before
income taxes:
Book Manufacturing $ 3,635 $ 3,699 $ 6,780 $ 7,544
Customized Education (44) (262) (178) (613)
Specialty Publishing 901 (324) 1,809 (14)
Gains from asset sales -- 300 -- 1,181
Intersegment profit
and other (184) (155) (162) (274)
Total $ 4,308 $ 3,258 $ 8,249 $ 7,824
Net income per
diluted share:
Book Manufacturing $ 0.46 $ 0.46 $ 0.87 $ 0.95
Customized Education -- (0.03) (0.02) (0.08)
Specialty Publishing 0.10 (0.04) 0.21 --
Gains from asset sales -- 0.04 -- 0.14
Intersegment profit
and other (0.02) (0.02) (0.02) (0.03)
Total $ 0.54 $ 0.41 $ 1.04 $ 0.98
(B) Prior period amounts have been adjusted to reflect the
three-for-two stock split effected in the form of a 50% stock
dividend distributed on August 31, 2001.
COURIER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
March 30, September 29,
ASSETS 2002 2001
Current assets:
Cash and cash equivalents $ 41 $ 173
Accounts receivable 28,972 33,806
Inventories 21,581 22,140
Deferred income taxes 2,819 2,837
Other current assets 289 753
Total current assets 53,702 59,709
Property, plant and equipment, net 42,441 44,932
Goodwill and other intangibles, net 25,490 25,498
Prepublication costs 3,001 2,904
Other assets 579 572
Total assets $125,213 $133,615
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 76 $ 76
Accounts payable 9,189 11,933
Accrued taxes 4,020 6,092
Other current liabilities 11,418 12,928
Total current liabilities 24,703 31,029
Long-term debt 8,963 16,501
Deferred income taxes 3,036 2,801
Other liabilities 2,882 2,959
Total liabilities 39,584 53,290
Total stockholders' equity 85,629 80,325
Total liabilities and
stockholders' equity $125,213 $133,615
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