Courier Corp. (CRRC, Financial) filed Quarterly Report for the period ended 2010-03-27.
Courier Corp. has a market cap of $208.2 million; its shares were traded at around $17.37 with a P/E ratio of 16.9 and P/S ratio of 0.9. The dividend yield of Courier Corp. stocks is 4.8%.CRRC is in the portfolios of Chuck Royce of Royce& Associates.
On January 15, 2010, the Company acquired the assets of Highcrest Media LLC (Highcrest Media), a Massachusetts-based provider of software solutions that streamline the production of customized textbooks for use in colleges, universities and businesses. The acquisition also complements the Companys investment during fiscal 2010 in digital printing technology. The $3 million cash acquisition, which has additional future earn out potential payments of up to $1.2 million, was accounted for as a purchase, and accordingly, Highcrest Medias financial results are included in the book manufacturing segment in the consolidated financial statements from the date of acquisition. The acquisition of Highcrest Media is expected to be modestly accretive to the Companys earnings for fiscal 2010.
In fiscal 2009, the Company recorded restructuring costs of $3.5 million in the second quarter and $3.7 million in the first half of the year. Restructuring costs included employee severance expenses related to cost savings initiatives in both of the Companys segments, as well as winding down Creative Homeowners distribution services and closing and consolidating the Book-mart Press manufacturing facility during the second quarter of fiscal 2009. The following table details restructuring costs by segment and by classification in the accompanying consolidated statements of operations.
The Company evaluates possible impairment of goodwill and other intangibles on an annual basis or whenever events or circumstances indicate that the carrying value of the assets may not be recoverable. Due to a decline in sales and profits at Dover during the second quarter of fiscal 2009, resulting from the continued downturn in the economic environment and in consumer spending, the Company performed an interim test of Dovers goodwill. As a result of the impairment tests, the Company had concluded that the carrying value of Dovers goodwill exceeded its estimated fair value and recorded a pre-tax impairment charge of $15.6 million, representing 100% of Dovers goodwill, at the end of last years second quarter. On an after-tax basis, the impairment charge was $10.1 million, or $.86 per diluted share.
Within the book manufacturing segment, the Company focuses primarily on three key markets: education, religious and specialty trade. In the second quarter of fiscal 2010, sales to the education market were down 2% to $21.1 million but increased 6% to $40.9 million in the first six months compared to the same periods last year, primarily from sales of four-color textbooks to colleges and universities. However, sales of elementary and high school books were down reflecting continued pressure on state and local school budgets. Sales to the specialty trade market grew 6% to $14.2 million in the quarter and grew 3% to $29.1 million year to date compared to prior year periods, with growth in four-color sales as well as a number of new customers. Sales to the religious market were comparable to the prior year second quarter at $12.5 million and were up 7% to $30.8 million compared to the first half of last year.
Cost of sales in the book manufacturing segment decreased by 8% to $40.2 million for the quarter and by 3% to $82.0 million compared to the same periods last year. Cost of sales in the second quarter and first six months of fiscal 2009 included $2.8 million of restructuring costs. Excluding these restructuring costs, the decrease in cost of sales for the quarter and first six months reflects the benefit of last years cost reductions. Gross profit increased by 62% to $9.7 million for the quarter, and as a percentage of sales, was 19.5% compared to 12.1% in last years second quarter. For the first half of the year, gross profit increased 37% to $22.8 million and, as a percentage of sales, improved to 21.8% from 16.5% in the first six months of fiscal 2009. In addition to last years restructuring costs, the improvement in gross profit reflects the growth in sales, improved capacity utilization and increased revenue from recycling programs, which were offset in part by continued industry-wide competitive pricing pressures.
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Courier Corp. has a market cap of $208.2 million; its shares were traded at around $17.37 with a P/E ratio of 16.9 and P/S ratio of 0.9. The dividend yield of Courier Corp. stocks is 4.8%.CRRC is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Revenues in the second quarter of fiscal 2010 were slightly below the same period last year at $58.9 million while sales for the first half of the year increased 3% to $122.0 million compared to fiscal 2009. Book manufacturing segment revenues grew slightly in the second quarter compared to last year and increased 4% to $104.8 million for the first six months. The year-to-date growth in sales was primarily due to increased demand for four-color books and religious scriptures. In the specialty publishing segment, revenues were down 3% to $11.7 million in the quarter compared to last years second quarter, with sales growth at REA offset by sales declines at Dover and Creative Homeowner. For the first half of the year, sales in this segment were down 1% to $23.3 million compared to the first six months of last year with sales growth at both REA and Dover largely offset by a decline in sales at Creative Homeowner. The winding down of Creative Homeowners book distribution services in January 2009 also contributed to its sales decline compared to the first half of this year. Net income was $1.4 million and $4.2 million for the second quarter and first six months of fiscal 2010, respectively, reflecting improved performance in both of the Companys business segments. In the prior year, the Company recorded a second-quarter net loss of $11.2 million, or $.94 per diluted share, and for the first half of the year, a net loss of $10.5 million, or $.88 per diluted share. These results included restructuring costs related to cost saving initiatives in both of the Companys segments totaling $3.5 million for the second quarter and $3.7 million for the first six months. In addition, the Company recorded a pre-tax impairment charge of $15.6 million in last years second quarter related to Dovers goodwill. Pre-tax restructuring and impairment charges totaled $19.1 million in the second quarter, or $1.04 per diluted share, and $19.3 million for the first six months, or $1.05 per diluted share.On January 15, 2010, the Company acquired the assets of Highcrest Media LLC (Highcrest Media), a Massachusetts-based provider of software solutions that streamline the production of customized textbooks for use in colleges, universities and businesses. The acquisition also complements the Companys investment during fiscal 2010 in digital printing technology. The $3 million cash acquisition, which has additional future earn out potential payments of up to $1.2 million, was accounted for as a purchase, and accordingly, Highcrest Medias financial results are included in the book manufacturing segment in the consolidated financial statements from the date of acquisition. The acquisition of Highcrest Media is expected to be modestly accretive to the Companys earnings for fiscal 2010.
In fiscal 2009, the Company recorded restructuring costs of $3.5 million in the second quarter and $3.7 million in the first half of the year. Restructuring costs included employee severance expenses related to cost savings initiatives in both of the Companys segments, as well as winding down Creative Homeowners distribution services and closing and consolidating the Book-mart Press manufacturing facility during the second quarter of fiscal 2009. The following table details restructuring costs by segment and by classification in the accompanying consolidated statements of operations.
The Company evaluates possible impairment of goodwill and other intangibles on an annual basis or whenever events or circumstances indicate that the carrying value of the assets may not be recoverable. Due to a decline in sales and profits at Dover during the second quarter of fiscal 2009, resulting from the continued downturn in the economic environment and in consumer spending, the Company performed an interim test of Dovers goodwill. As a result of the impairment tests, the Company had concluded that the carrying value of Dovers goodwill exceeded its estimated fair value and recorded a pre-tax impairment charge of $15.6 million, representing 100% of Dovers goodwill, at the end of last years second quarter. On an after-tax basis, the impairment charge was $10.1 million, or $.86 per diluted share.
Within the book manufacturing segment, the Company focuses primarily on three key markets: education, religious and specialty trade. In the second quarter of fiscal 2010, sales to the education market were down 2% to $21.1 million but increased 6% to $40.9 million in the first six months compared to the same periods last year, primarily from sales of four-color textbooks to colleges and universities. However, sales of elementary and high school books were down reflecting continued pressure on state and local school budgets. Sales to the specialty trade market grew 6% to $14.2 million in the quarter and grew 3% to $29.1 million year to date compared to prior year periods, with growth in four-color sales as well as a number of new customers. Sales to the religious market were comparable to the prior year second quarter at $12.5 million and were up 7% to $30.8 million compared to the first half of last year.
Cost of sales in the book manufacturing segment decreased by 8% to $40.2 million for the quarter and by 3% to $82.0 million compared to the same periods last year. Cost of sales in the second quarter and first six months of fiscal 2009 included $2.8 million of restructuring costs. Excluding these restructuring costs, the decrease in cost of sales for the quarter and first six months reflects the benefit of last years cost reductions. Gross profit increased by 62% to $9.7 million for the quarter, and as a percentage of sales, was 19.5% compared to 12.1% in last years second quarter. For the first half of the year, gross profit increased 37% to $22.8 million and, as a percentage of sales, improved to 21.8% from 16.5% in the first six months of fiscal 2009. In addition to last years restructuring costs, the improvement in gross profit reflects the growth in sales, improved capacity utilization and increased revenue from recycling programs, which were offset in part by continued industry-wide competitive pricing pressures.
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