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Courier Q2 Revenues Flat Due to Failure of Book Distribution Customer, Slow FastPencil Sales

May 8, 2014

NORTH CHELMSFORD, MA—May 8, 2014—Courier Corp., one of America’s leading innovators in book manufacturing, publishing and content management, today announced results for the quarter ended March 29, 2014, the second quarter of its 2014 fiscal year. Revenues were $61.4 million, off slightly from $61.8 million in last year’s second quarter. For the quarter, the company reported a loss of $3.4 million or $.30 per diluted share, including a non-cash impairment charge of $1.9 million or $.17 per diluted share related to FastPencil, a California startup acquired by Courier last spring, as well as an $825,000 write-off associated with the failure of a book distribution customer. Excluding the impairment charge and the receivable write-off, the adjusted loss for the quarter was $1.0 million or $.09 per diluted share. In fiscal 2013’s second quarter, net income was $336,000 or $.03 per diluted share.

For the first six months of fiscal 2014, Courier revenues were $134.2 million, an increase of 6 percent from $126.5 million last year. The company reported a loss for the six-month period of $0.7 million or $.06 per diluted share, including the second-quarter impairment charge and receivable write-off; excluding those items, income through six months was $1.7 million or $.14 per diluted share, versus net income of $2.8 million or $.24 per diluted share for the first half of fiscal 2014. Details of the impairment charge and other items, including reconciliations of non-GAAP measures to GAAP, can be found in the tables at the end of this release.

“For years our financial results have reflected the seasonal nature of our business, with a slow second quarter paving the way for a stronger second half,” said Courier chairman and CEO James F. Conway III. “Our performance so far this year is in line with that history. But this spring we faced three additional challenges that reinforced the pattern and led to a quarterly loss.

He continued: “Externally, the sudden closing and liquidation of our primary distributor into the home improvement channel hurt results. Internally, we had to absorb additional depreciation costs associated with expanded digital press capacity acquired in anticipation of the coming textbook season—an investment that we are confident will be amply rewarded over time. Finally, we took a non-cash impairment charge of $1.9 million related to our California software startup, FastPencil. While FastPencil’s enterprise-level sales are taking longer than we had hoped, the company’s innovative technology platform continues to gain traction in the large and growing community of self-publishers.

 

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