Courier Reports Sales Increase, Return to Profitability

“We also are investing in much-needed additional capacity at our big four-color offset plant in Kendallville, IN, with a new press scheduled for December startup. Already widely regarded as the most efficient four-color book plant in the United States, the Kendallville plant will become even more so to meet projected demand in education and specialty trade.

“At the same time, in an uncertain economy we took care to manage frugally without compromising our service to customers. Faced with the continuing weakness in the home improvement market, we took steps to further reduce operating costs at our Creative Homeowner publishing business while safeguarding its award-winning editorial quality for the market's eventual recovery. We made capital investments totaling $25 million related to Courier Digital Solutions and our new press at Kendallville. And we finished the year in a strong financial position with solid cash flow. I am also pleased to report that once again, Courier's Board of Directors declared a dividend of $.21 per share, the same as last quarter."

Book manufacturing: focusing on growth areas

Courier's book manufacturing segment had fourth-quarter sales of $61.1 million, up 4 percent from $58.8 million last year. Operating income in the fourth quarter was $6.8 million, versus $9.0 million in the fourth quarter of fiscal 2009, excluding fiscal 2009 restructuring costs.

For the full year, book manufacturing sales were $222.8 million, up 5 percent from $212.2 million in fiscal 2009. The segment's full-year operating income was $19.1 million. Last year's operating income was $19.0 million, excluding restructuring costs.

The segment's gross profit was $14.0 million or 22.8 percent of sales in the fourth quarter, versus $15.0 million or 25.5 percent a year ago excluding restructuring costs. Gross profit for fiscal 2010 was $46.8 million or 21.0 percent of sales, up from $44.3 million or 20.9 percent of sales last year excluding restructuring costs. Factors affecting margins included a very competitive pricing environment, improved capacity utilization earlier in the year, increased recycling income, and cost-reduction measures.