10-year

10-Year Anniversary Promotion (20% off)

Join GuruFocus Premium Membership Now for Only $279/Year

Once a decade discount

Save up to $500 on Global Membership.

Don't Miss It !

Free 7-day Trial
All Articles and Columns »

Courier Corp. Reports Operating Results (10-Q)

February 03, 2011 | About:
insider

10qk

18 followers
Courier Corp. (CRRC) filed Quarterly Report for the period ended 2010-12-25.

Courier Corp has a market cap of $172.4 million; its shares were traded at around $14.3 with a P/E ratio of 18.8 and P/S ratio of 0.7. The dividend yield of Courier Corp stocks is 5.9%.Hedge Fund Gurus that owns CRRC: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns CRRC: Chuck Royce of Royce& Associates.

Highlight of Business Operations:

The Companys specialty publishing segment reported first quarter sales of $10.8 million, down 7% from last years first quarter. Sales were down 3% at Dover to $8.2 million while sales at REA decreased 31% to $1.3 million compared to last years first quarter. The decline in REAs sales reflects an exceptionally strong first quarter in the prior year due to both a major product launch and a chain-wide merchandising order at a large nationwide bookseller. Retail sell-through of REAs products was up in the first quarter of fiscal 2011. Sales at Creative Homeowner grew 7% to $1.3 million, reflecting improving home-center book sales.

The operating loss for the specialty publishing segment for the first quarter was $0.8 million, compared to an operating loss of $0.5 million in last years first quarter, reflecting the impact of the lower sales at Dover and REA. Creative Homeowners operating loss in the quarter was $0.7 million, an improvement of $0.5 million compared to the first three months of last year.

Interest expense, net of interest income, was $203,000 in the first quarter of fiscal 2011, compared to $118,000 of net interest expense in the first three months of last year. Average debt under the revolving credit facility in the first quarter of fiscal 2011 was approximately $20.7 million at an average annual interest rate of 0.8%, generating interest expense of approximately $39,000. Average debt under the revolving credit facility in the first quarter of last year was approximately $11.9 million at an average annual interest rate of 0.7%, generating interest expense of approximately $22,000. Interest expense also includes commitment fees and other costs associated with maintaining the Companys $100 million revolving credit facility. In addition, the Company entered into a four-year term loan in March 2010 providing up to $8 million to finance the purchase of digital print assets. At December 25, 2010, $6.1 million was borrowed under this term loan, which added $53,000 of interest expense in the first quarter. Interest capitalized in the first quarter of fiscal 2011 was approximately $26,000; no interest was capitalized in the first three months of fiscal 2010.

During the first three months of fiscal 2011, operations provided $4.4 million of cash, compared to $9.1 million in the first quarter of last year. Net income was $1.7 million and depreciation and amortization were $5.4 million. An increase in working capital used $2.3 million of cash in the first quarter of fiscal 2011.

Investment activities in the first quarter of fiscal 2011 used $5.0 million of cash. Capital expenditures were $3.8 million, primarily related to the Companys investment in a second HP digital inkjet press at its North Chelmsford, Massachusetts facility and its fourth four-color manroland press at the Kendallville, Indiana facility. For the entire fiscal year, capital expenditures are expected to be approximately $23 to $25 million, including installation of a third HP digital inkjet press scheduled for the third quarter. Prepublication costs were $1.1 million, comparable to the first three months of last year. For the full fiscal year, prepublication costs are projected to be approximately $4 million.

Financing activities for the first three months of fiscal 2011 provided approximately $0.6 million of cash. Cash dividends of $2.5 million were paid and borrowings increased by $3.2 million during the first quarter of fiscal 2011. At December 25, 2010, borrowings under a term loan used to finance the purchase of the Companys new digital print assets were $6.1 million, with $2.5 million at a fixed annual interest rate of 3.9% and $3.6 million at a fixed annual interest rate of 3.6%. The Company also has a $100 million long-term revolving credit facility in place under which the Company can borrow at a rate not to exceed LIBOR plus 1.5%. At December 25, 2010, the Company had $20.7 million in borrowings under this facility at an interest rate of 0.8%. The revolving credit facility, which matures in 2013, contains restrictive covenants including provisions relating to the maintenance of working capital, the incurrence of additional indebtedness and a quarterly test of EBITDA to debt service. The Company was in compliance with all such covenants at December 25, 2010. The facility also provides for a commitment fee not to exceed 3/8% per annum on the unused portion. The revolving credit facility is used by the Company for both its long-term and short-term financing needs. The Company believes that its cash on hand, cash from operations and the available credit facility will be sufficient to meet its cash requirements through 2011.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 2.3/5 (3 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK