Courier Reports Education Sales Up, Borders Fallout Induces Loss
NORTH CHELMSFORD, MA—July 21, 2010—Courier Corp., one of America’s leading book manufacturers and specialty publishers, announced results for the quarter ended June 25, 2011, the third quarter of its 2011 fiscal year. Revenues were $61.9 million, down 5 percent from last year’s third-quarter sales of $64.9 million. The total was helped by solid gains in textbook sales, but hurt by the continuing fallout from the bankruptcy proceedings of Borders Group.
The loss of sales to Borders was particularly damaging to Courier’s Research & Education Association (REA) publishing business, for which the bookseller had been a key customer. Faced with continuing uncertainty about the fate of the remaining Borders stores, Courier took a pre-tax, non-cash impairment charge of $8.6 million. As a result, the company reported a third-quarter net loss of $3.1 million.
Excluding the impairment charge, adjusted net income for the quarter was $2.0 million, up 15 percent from net income of $1.8 million or $.15 per diluted share in the third quarter of fiscal 2010. A reconciliation of adjusted net income and other non-GAAP measures is included in the tables at the end of this release.
For the first nine months of fiscal 2011, Courier revenues were $185.7 million vs. $186.9 in fiscal 2010. Its net loss for the year-to-date period was $6.3 million, compared to net income of $6 million in the first nine months of fiscal 2010. Excluding the third-quarter impairment charge and second-quarter charges for restructuring following a plant closing and a bad-debt provision related to Borders, adjusted net income for the first nine months of fiscal 2011 was $4 million.
In Courier’s book manufacturing segment, robust demand for college textbooks highlighted a strong quarter in the education market. However, trade sales were down sharply, reflecting reduced ordering in the wake of Borders’ store closings. Courier’s publishing segment was similarly affected, with sales to Borders down $650,000 in the third quarter and down $2.4 million for the first nine months of fiscal 2011.