Courier Reports Sales Increase, Return to Profitability

Specialty publishing: pockets of opportunity in soft markets

Courier’s specialty publishing segment includes three businesses: Dover Publications, a niche publisher with thousands of titles in dozens of specialty trade markets; Research & Education Association (REA), a publisher of test preparation books and study guides; and Creative Homeowner, which publishes books on home design, decorating, landscaping and gardening.

Fourth-quarter revenues for the segment were $11.9 million, the same as last year's fourth quarter. Sales were up 6 percent at Dover, flat at REA after strong quarters earlier in the year, and down 23 percent at Creative Homeowner, reflecting the lackluster home improvement market. Because of the drop in sales, Creative Homeowner's operating loss for the quarter rose to $778,000 from $526,000 a year earlier. In total, the segment's fourth-quarter operating income was $211,000, versus $928,000 in last year's fourth quarter.

For the year as a whole, specialty publishing sales were $46.0 million, down 2 percent from $46.8 million in fiscal 2009. Including Creative Homeowner's loss of $2.6 million, the segment's full-year operating loss was $714,000, an improvement over last year of $1 million, attributable to revenue growth of 4 percent at Dover and 16 percent at REA.

“Given the adverse retail environment, we were happy to see Dover sales rise as well as they did, helped by children's books as well as direct-to-consumer, online and international sales," said Conway. "Dover also made news with several new titles in its Calla Edition series, most notably Marilyn, August 1953, a portfolio of previously unpublished photographs of Marilyn Monroe that has sparked widespread interest both domestically and internationally. Meanwhile, REA sales were up 16 percent, thanks to the combination of excellent spring releases and revamped cover designs that have strengthened the brand's in-store presence.

“Courier's non-cash, pre-tax impairment charge of $4.7 million related to Creative Homeowner reflects the systemic problems it currently faces in the home improvement market. For the last two years we have aggressively reduced costs at Creative Homeowner as that market has contracted. Yet within this shrinking market, Creative Homeowner products have actually gained share, reflecting their continuing excellence and relevance. Apart from editorial, virtually all Creative Homeowner functions have now been folded into unified publishing segment operations. And when the market eventually recovers, I'm confident that Creative Homeowner will be able to capitalize on it with outstanding titles calibrated to consumers' evolving needs."