Courier Reports Sales Up, Earnings Down Due to Plant Closure
“It was a challenging quarter before the Borders announcement, and that made it more so,” said Courier Chairman and CEO James F. Conway III. “We were pleased to be able to grow revenues overall, but disheartened by the need to close our single-color paperback plant in Stoughton in response to the continuing shift in demand from one- to four-color books. We are grateful to our Stoughton employees for their many years of loyal service, and we have done our best to provide as many as possible with new opportunities elsewhere in our organization.
“We did have important successes in the quarter, including a dramatic turnaround in religious sales following a slow first quarter, as well as continued double-digit growth in the college textbook market. Business was down at Courier Digital Solutions, but this was expected in CDS’s highly seasonal customized textbook business. We continue to expect healthy growth over the balance of the year, and expect to have our third HP digital inkjet press up and running in June.
“The Borders situation promises to be a continuing challenge for both segments of our business. However, with a reduced cost structure, exciting new technology investments in place in book manufacturing, and signs of accelerating demand for the peak education season, I look forward to a stronger third and fourth quarter.”
Book manufacturing: religious sales rebound
Courier’s book manufacturing segment had second-quarter sales of $55.6 million, up 11 percent from $50.0 million in last year’s second quarter. The segment’s second-quarter operating income was $2.4 million, excluding restructuring costs, versus $2.8 million a year ago. Gross profit in the segment, excluding restructuring costs, was $8.9 million or 16.1 percent of sales, versus $9.7 million or 19.5 percent of sales in fiscal 2010, reflecting $1.1 million in increased depreciation related to the addition of new capacity in anticipation of future growth, as well as frictional costs related to the closing of the Stoughton plant and the transfer of existing one-color jobs to other facilities.