Courier’s Sales Off Overall, but Digital Business Up Sharply
“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.
The book manufacturing segment focuses on three publishing markets: education, religion, and specialty trade. Sales to the education market were up 4 percent in the quarter due to increased sales of four-color textbooks for colleges and universities, though one-color sales were down in keeping with the industry’s continuing shift from one- to four-color production. Sales to the religious market were down 22 percent from last year’s first quarter, reflecting both the timing of orders from the company’s largest religious customer and the prior-year comparison with one of the strongest quarters in the history of its religious business. Sales to the specialty trade market were up 4 percent from a year ago.
During the quarter the company completed the installation of its second HP digital inkjet printing system and ramped up production at its Courier Digital Solutions facility to a three-shift operation to keep pace with accelerating demand in the education and trade markets. In addition, shortly after the end of the quarter, Courier signed a multi-year manufacturing agreement with one of the world’s leading educational publishers and began preparing to acquire a third HP digital press in time for the peak textbook season in late spring.