Courier Reports Record Third Quarter; Sales and Earnings Hit All-Time High.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 June June: see month. 25, 2005, the third quarter of its 2005 fiscal year. Helped by outstanding performance in its book manufacturing segment, Courier posted the highest third-quarter and nine-month revenues and net income in its history. Revenues for the quarter were $58.8 million, up 6% from last year's third-quarter sales of $55.5 million. Net income for the quarter was $5.9 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, an increase of 13% over prior-year results of $5.2 million or $.42 per diluted share. (Prior-year earnings per share have been adjusted to reflect a three-for-two stock split on May 27, 2005.) For the first nine months of Courier's 2005 fiscal year, net income was $14.1 million or $1.13 per diluted share, up 9% from $13.0 million or $1.05 per diluted share for the first nine months of fiscal 2004. Nine-month sales for fiscal 2005 were $163.5 million, up 8% from $152.0 million in the first nine months of last year. Robust sales to educational publishers were key to Courier's strong quarterly results. Book manufacturing revenues were up 8% from last year's third quarter, and up 9% for the fiscal year to date, as Courier's increased 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 capacity enabled it to take advantage of growing demand for four-color textbooks. 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 down 4% for the quarter, but up 1% through nine months. "Our book manufacturing business performed very well this quarter," 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 continued to benefit from our disciplined investments in capacity and service, increasing our share of business with leading textbook textbook Informatics A treatise on a particular subject. See Bible. publishers on top of solid growth in underlying demand. Our specialty publishing segment delivered mixed results, with a sales gain at Research & Education Association offset by slow 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. On the other hand, we made headway head·way n. 1. Forward movement or the rate of forward movement, especially of a ship. 2. Progress toward a goal. 3. The clear vertical space beneath a ceiling or archway; clearance. 4. in our previously announced reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. of Dover sales and marketing, receiving enthusiastic reactions from customers and achieving month-by-month sequential One after the other in some consecutive order such as by name or number. growth in sales as the quarter progressed. "It was also a successful spring by other measures. We completed our three-for-two stock split while retaining the dividend at its pre-split level, resulting in an effective dividend increase of 50%. In our publishing segment, we reached 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. in a warehouse consolidation initiative that we expect to complete in September September: see month. . More significantly, we 'went live' this week with a major information technology upgrade replacing old Dover systems with SAP sap, fluid in plants consisting of water and dissolved substances. Cell sap refers to this fluid present in the large vacuole, or cell cavity, that occupies most of the central portion of mature plant cells. . In addition, our cash flow and financial condition continue to be excellent, leaving us well positioned for 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. growth." Book manufacturing 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. up 31% Courier's book manufacturing segment had third-quarter sales of $50.6 million, up 8% from last year's third quarter. Pretax income for the segment rose 31% in the quarter to $8.3 million or $.43 per diluted share, versus $6.4 million or $.34 per diluted share in 2004. For the first nine months of the fiscal year, book manufacturing sales were up 9% to $138.8 million, with pretax income up 22% to $19.6 million or $1.02 per share. Gross profit in the segment rose 20% to $15.0 million in the quarter, and was up 11% through three quarters. Gross profit also increased as a percentage of sales, rising to 29.7% in the third quarter from 26.8% a year earlier, and reaching 28.0% through nine months versus 27.3% in fiscal 2004. The book manufacturing segment focuses on three publishing markets: education, religion, and specialty trade. Sales to the education market rose 8% in the quarter, as the trend to increased demand for four-color textbooks continued in both the elementary/high school and college markets. Through the first nine months of the year, education sales were up 16% over fiscal 2004. Sales to the religious market were up 8% for the third quarter, with some of the gain resulting from order timing. Religious sales were down 1% through nine months, reflecting a decision to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: production of certain low-priced work. Sales to the specialty trade market were down 3% for the third quarter and up 3% through nine months, in keeping with modest growth in the overall market. "Our increased four-color capacity was crucial to our performance this quarter," said Mr. Conway. "The new ManRoland press we installed last year was running at capacity throughout the quarter, and we are preparing for the installation of a second identical press by the end of 2005 in anticipation The performance of an act or obligation before it is legally due. In patent law, the publication of the existence of an invention that has already been patented or has a patent pending, of further growth in the textbook market. At the same time, we have been working hard to turn our sales growth into increased earnings, and our efforts have been increasingly successful. Our plants and workforce are more productive than ever, resulting in benefits for customers and shareholders alike." Specialty book publishing results down at Dover, up at 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) Courier's specialty publishing segment includes two businesses: Research & Education Association (REA), a publisher of test preparation books and study guides, and Dover Publications, a niche niche: see ecology. niche Smallest unit of a habitat that is occupied by an organism. A habitat niche is the physical space occupied by the organism; an ecological niche is the role the organism plays in the community of organisms found in the publisher with thousands of titles in dozens of specialty trade markets. Overall, the segment reported third-quarter sales of $9.9 million, down 4% from $10.4 million in last year's third quarter. Third-quarter sales at REA were $1.4 million, up 7% from $1.3 million in 2004. At Dover, third-quarter sales were $8.6 million, down 6% from $9.1 million a year earlier, as an 11% decline in sales to U.S. retailers more than offset an 11% increase in international sales and a 13% gain in direct-to-consumer sales. The segment's pretax income was $0.7 million or $.04 per diluted share for the quarter, down from $1.5 million or $.08 per diluted share in fiscal 2004. Part of this decline was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to expenditures of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $300,000 in support of the warehousing and information technology projects mentioned above. Gross profit as a percentage of sales was 44.5%, versus 47.3% a year ago, reflecting both the effects of reduced sales volume at Dover and the costs of the warehouse initiative, which is expected to generate annual savings of approximately $800,000 starting in fiscal 2006. For the first nine months, specialty publishing sales were $29.9 million, up 1% from $29.6 million last year, with Dover sales contributing $26.0 million and REA sales contributing $3.9 million. Pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income for the segment through nine months was $2.6 million or $.13 per diluted share compared to $3.9 million or $.20 per diluted share last year. "We knew we had work to do to bring Dover's sales and marketing organization up to the level needed to capture the revenues its products deserve," said Mr. Conway. "The good news is that we are starting to see positive signs. With several key hires in place, the culture is being revitalized re·vi·tal·ize tr.v. re·vi·tal·ized, re·vi·tal·iz·ing, re·vi·tal·iz·es To impart new life or vigor to: plans to revitalize inner-city neighborhoods; tried to revitalize a flagging economy. , with sales, marketing and editorial working together to meet the needs of both readers and retailers. A down quarter is not surprising during such a transformation. More important for the long term is the reaction of customers and employees to the changes, and these have been overwhelmingly positive. "Both Dover and REA have always had outstanding editorial content. We are getting better at tailoring that content to today's markets, producing and distributing it with increasing efficiency, and strengthening our already strong ties to readers. We are now also on our way to forging a new generation of proactive, mutually beneficial Adj. 1. mutually beneficial - mutually dependent interdependent, mutualist dependent - relying on or requiring a person or thing for support, supply, or what is needed; "dependent children"; "dependent on moisture" relationships with the trade retailers who represent more than two-thirds of our volume. I expect additional evidence of this achievement in the fourth quarter." Outlook "With our book manufacturing business enjoying its best year ever, we remain on track for record full-year results and continued growth in fiscal 2006," said Mr. Conway. "At the same time, our specialty publishing segment is making progress that should result in improved performance next year. "With only one quarter to go in our fiscal year, we have narrowed our 2005 guidance, though it is still within the previously announced range. We now expect full-year sales growth of 6% to 8%, resulting in total sales of between $224 and $228 million, which would be a new record high for Courier. And we expect full-year earnings per diluted share in the range of $1.73 to $1.80, an increase of between 4% and 8% from fiscal 2004 earnings of $1.67 per diluted share (as adjusted for our May 2005 stock split) -- which would also be a company record. This guidance excludes any impact from the recently revised stock option accounting rules, which are presently scheduled to become effective beginning in the first quarter of our fiscal year 2006." 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 or information technology systems, 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)
(In thousands, except per share amounts)
QUARTER ENDED NINE MONTHS ENDED
-------------------- --------------------
June 25, June 26, June 25, June 26,
2005 2004 2005 2004
----------- -------- --------- ----------
Net sales $58,758 $55,489 $163,522 $151,971
Cost of sales 39,343 38,140 111,053 103,466
----------- -------- --------- ----------
Gross profit 19,415 17,349 52,469 48,505
Selling and administrative
expenses 10,533 9,604 30,731 28,878
Interest income, net (113) 28 (182) (26)
Gain on real estate sale - 250 - 250
----------- -------- --------- ----------
Income before taxes 8,995 7,967 21,920 19,903
Provision for income taxes 3,142 2,773 7,782 6,946
----------- -------- --------- ----------
Net income $5,853 $5,194 $14,138 $12,957
=========== ======== ========= ==========
Net income per diluted share $0.47 $0.42 $1.13 $1.05
=========== ======== ========= ==========
Cash dividends declared per
share $0.10 $0.0583 $0.234 $0.175
=========== ======== ========= ==========
Wtd. average diluted shares
outstanding 12,498 12,345 12,475 12,325
SEGMENT INFORMATION:
Net sales:
----------
Book Manufacturing $50,585 $46,955 $138,787 $127,600
Specialty Publishing 9,936 10,394 29,943 29,585
Intersegment sales (1,763) (1,860) (5,208) (5,214)
----------- -------- --------- ----------
Total $58,758 $55,489 $163,522 $151,971
Income before taxes:
--------------------
Book Manufacturing $8,334 $6,352 $19,646 $16,082
Specialty Publishing 715 1,503 2,568 3,883
Intersegment profit and other (54) 112 (294) (62)
----------- -------- --------- ----------
Total $8,995 $7,967 $21,920 $19,903
Net income per diluted share:
-----------------------------
Book Manufacturing $0.43 $0.34 $1.02 $0.85
Specialty Publishing 0.04 0.08 0.13 0.20
Intersegment profit and other - - (0.02) -
----------- -------- --------- ----------
Total $0.47 $0.42 $1.13 $1.05
Shares outstanding and per share amounts have been retroactively
adjusted to reflect a three-for-two stock split effected on May 27,
2005.
COURIER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
June 25, September 25,
ASSETS 2005 2004
------ ---------- ----------
Current assets:
Cash and cash equivalents $28,896 $23,965
Accounts receivable 31,977 34,072
Inventories 26,624 25,108
Deferred income taxes 2,857 2,852
Other current assets 1,171 840
---------- ----------
Total current assets 91,525 86,837
Property, plant and equipment, net 51,316 48,482
Goodwill 33,255 33,255
Prepublication costs 5,394 5,127
Other assets 1,538 1,498
---------- ----------
Total assets $183,028 $175,199
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current maturities of long-term debt $83 $83
Accounts payable 6,604 10,059
Accrued taxes 3,389 5,557
Other current liabilities 14,114 13,664
---------- ----------
Total current liabilities 24,190 29,363
Long-term debt 448 510
Deferred income taxes 7,743 7,706
Other liabilities 2,736 2,630
---------- ----------
Total liabilities 35,117 40,209
---------- ----------
Total stockholders' equity 147,911 134,990
---------- ----------
Total liabilities and stockholders'
equity $183,028 $175,199
========== ==========
COURIER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
For the Nine Months Ended
-------------------------
June 25, June 26,
2005 2004
------------ ----------
Operating Activities:
Net income $14,138 $12,957
Adjustments to reconcile net income to
cash provided from operating activities:
Depreciation and amortization 8,904 8,304
Deferred income taxes 32 1,607
Changes in working capital (4,925) (6,573)
Tax benefits of stock option activity 315 384
Gain on sale of assets - (163)
Other, net 178 (1,206)
------------ ----------
Cash provided from operating activities 18,642 15,310
------------ ----------
Investment Activities:
Capital expenditures (9,810) (10,069)
Prepublication costs (2,183) (2,032)
Business acquisition - (11,850)
Proceeds from sale of assets - 1,664
------------ ----------
Cash used for investment activities (11,993) (22,287)
------------ ----------
Financing Activities:
Repayments of debt, net (62) (61)
Cash dividends (2,838) (2,094)
Proceeds from stock plans 1,182 580
------------ ----------
Cash used for financing activities (1,718) (1,575)
------------ ----------
Increase (decrease) in cash and cash
equivalents 4,931 (8,552)
Cash and cash equivalents at the beginning
of the period 23,965 23,824
------------ ----------
Cash and cash equivalents at the end of the
period $28,896 $15,272
============ ==========
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