Courier Reports Education Sales Up, Borders Fallout Induces Loss
The book manufacturing segment focuses on three publishing markets: education, religious and specialty trade. Sales to the education market were up 10 percent in the quarter and up 6 percent through nine months, reflecting higher sales of four-color textbooks for colleges and universities. Sales to the religious market were down 3 percent from fiscal 2010’s third quarter, but up 6 percent at the company’s largest religious customer.
Through the first nine months of fiscal 2011, religious sales were up 4 percent. Sales to the specialty trade market were down 23 percent from last year’s third quarter and down 9 percent for the year to date, as publishers adjusted their ordering in response to the problems at Borders and the impact of e-books.
In June, the company installed its third HP four-color digital inkjet press at its Courier Digital Solutions facility in Chelmsford, MA, immediately utilizing this added capacity to meet sharply increased demand for customized textbooks. Meanwhile it successfully redistributed the one-color work formerly assigned to its Stoughton plant to other facilities with no impact on quality or customer service. Courier expects the plant closing to result in annualized pre-tax savings of approximately $4.5 million.
“The healthy market for college textbooks in general, and customized editions in particular, drove the strongest growth in our manufacturing segment,” said Conway. “In the religious market, we had a very good quarter with our largest customer, continuing the momentum from an outstanding second quarter and extending our Scripture distribution partnership into more than 100 countries. But while we had expected trade sales to be off following the Borders bankruptcy, the slump proved deeper than we had anticipated, with many trade publishers holding back on ordering and others reducing quantities in the face of a diminished sales channel.
“The good news was that our increased four-color capacity proved extremely useful both at our Kendallville, Indiana offset plant and at Courier Digital Solutions, with both facilities operating around the clock as the education market headed toward its seasonal peak. While demand for elementary and high school textbooks continues to be hampered by tight school budgets and the uncertainties surrounding state textbook adoption programs, the college market keeps chugging along, with customized textbooks growing even faster.”