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Courier’s Sales Off Overall, but Digital Business Up Sharply

January 18, 2011
NORTH CHELMSFORD, MA—Jan. 18, 2011—Courier Corp., one of America’s leading book manufacturers and specialty publishers, announced results for the quarter ended Dec. 25, 2010, the first quarter of its 2011 fiscal year.

Revenues for the quarter were $61.2 million, down 3 percent from last year’s first-quarter sales of $63.1 million. Net income for the quarter was $1.7 million, compared to $2.8 million in the first quarter of fiscal 2010.

However, the company reaffirmed its confidence in the remainder of the fiscal year, citing a history of quarter-to-quarter fluctuations in the timing of orders as well as major long-term agreements with two of its largest customers. Based on these and other factors, Courier raised its full-year earnings guidance by $.05 to a range of $.90 to $1.20 per diluted share.

First-quarter results were off in both of Courier’s business segments. At the same time, both segments benefited from the successful startup of Courier Digital Solutions, which has enabled improved efficiency in short-run production, leading to an increasing flow of manufacturing orders from Courier Publishing as well as other educational and trade publishers.

“While our new fiscal year got off to a slow start, we remain confident that we will hit our targets for the full year,“ said Courier Chairman and CEO James F. Conway III. “A major factor in our first-quarter shortfall was the timing of manufacturing orders in the religious market. Yet our relationship with our largest religious customer has never been better, and we are in the early stages of a new multi-year agreement which is already contributing to an expanded worldwide role for Courier.

”At the same time, we had excellent performance from Courier Digital Solutions, which is capitalizing on the accelerating trend towards customized college textbooks. And on the publishing side, we saw the first sales increase at Creative Homeowner in more than 3 years.

“During the quarter we also continued to add much-needed four-color capacity, both digital and offset, as our second HP digital inkjet system and our fourth high-speed manroland press ramped up smoothly and efficiently. And while our capital expenditures inevitably rose to cover the costs of these new systems, we remain in a strong position financially as well as an improved position competitively. So I am excited about our prospects for the remainder of our fiscal year.”

Book manufacturing: focusing on long-term opportunities

Courier’s book manufacturing segment had first-quarter sales of $53.0 million, off 3 percent from $54.8 million in last year’s first quarter. The segment’s operating income was $3.8 million, versus $5.7 million a year ago. Gross profit in the segment was $11.4 million or 21.5 percent of sales, versus $13.1 million or 23.8 percent of sales in fiscal 2010, reflecting lower one-color capacity utilization and pricing pressures throughout the industry.

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