Courier Corp. (CRRC) filed Quarterly Report for the period ended 2009-12-26.
Courier Corp. has a market cap of $163.7 million; its shares were traded at around $13.69 with a P/E ratio of 13.6 and P/S ratio of 0.7. The dividend yield of Courier Corp. stocks is 6.1%. Courier Corp. had an annual average earning growth of 15.9% over the past 10 years.CRRC is in the portfolios of Chuck Royce of ROYCE & ASSOCIATES.
Highlight of Business Operations:Revenues in the first quarter of fiscal 2010 increased 6% to $63.1 million compared to the same period last year. Book manufacturing segment revenues grew by 8% to $54.8 million due to an increase in sales of four-color textbooks and religious scriptures. In the specialty publishing segment, revenues increased slightly from the first quarter of last year to $11.6 million with strong sales growth at both Dover and REA largely offset by a decline in sales at Creative Homeowner. The winding down of Creative Homeowners book distribution services in the second quarter of fiscal 2009 also contributed to its sales decline compared to the first quarter of last year. Net income for the quarter was $2.8 million, compared to $0.7 million in the first quarter of fiscal 2009, primarily due to the improvement in sales as well as prior cost reductions.
The Companys specialty publishing segment reported first quarter sales of $11.6 million, up slightly from last years first quarter. Sales were up 18% at Dover to $8.4 million, reflecting strong sales in a wide range of categories as well as an increase in direct-to-consumer sales resulting from enhanced marketing activity and promotional programs. Sales at REA increased 48% over last years first quarter to $1.9 million as a result of their most significant quarterly launch of new titles. Sales at Creative Homeowner decreased 61% to $1.2 million, reflecting the persistent weakness in the nations housing sector, which has reduced store traffic and sales in the home center market, its largest channel. In addition, Creative Homeowners sales to book distributors declined as distributors continue to reduce their inventories. The sales decrease also reflects the cessation of Creative Homeowners book distribution services early in the second quarter of fiscal 2009, which supported one nationwide retailer and contributed approximately $1.2 million of revenue in last years first quarter. The Company anticipates an improvement in sales at Creative Homeowner with the upcoming spring and summer seasons.
Interest expense, net of interest income, was $118,000 in the first quarter of fiscal 2010, compared to $227,000 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 2010 was approximately $11.9 million at an average annual interest rate of 0.7%, generating interest expense of approximately $22,000. Average debt under the revolving credit facility in the first quarter of last year was approximately $25.2 million at an average annual interest rate of 3.1%, generating interest expense of approximately $190,000. Interest expense also includes commitment fees and other costs associated with maintaining the Companys $100 million revolving credit facility.
During the first three months of fiscal 2010, operations provided $9.1 million of cash, compared to $3.9 million in the first quarter of last year. Net income was $2.8 million and depreciation and amortization were $5.1 million. Working capital decreased by $1.4 million in the first quarter.
Investment activities in the first quarter of fiscal 2009 used $1.5 million of cash. Capital expenditures were $1.0 million. For the entire fiscal year, capital expenditures are expected to be approximately $12 to $14 million, with approximately half of the spending relating to a new digital print operation. The Company is currently negotiating a capital lease of up to $8 million for the digital print operation assets. Proceeds of approximately $0.6 million were received on the disposition of assets, including equipment from the Book-mart Press manufacturing facility. Prepublication costs were $1.0 million, compared to $1.2 million in the first three months last year. For the full fiscal year, prepublication costs are projected to be approximately $5 million.
Financing activities for the first three months of fiscal 2010 used approximately $7.6 million of cash. Cash dividends of $2.5 million were paid and borrowings decreased by $5.1 million during the first quarter of fiscal 2010. The Company 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 26, 2009, the Company had $8.4 million in borrowings under this facility at an interest rate of 0.7%. 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 26, 2009. 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 2010.
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