Courier Corp. (CRRC, Financial) filed Quarterly Report for the period ended 2009-06-27.
Courier Corporation is focused on streamlining and enhancing the process by which printed books and digital content reach end-user markets. They have three business segments: book manufacturing customized education andspecialized book publishing. Courier is a book manufacturer offeringservices from prepress and production through storage and distribution. Products include Bibles educational and consumer books and technical documentation primarily for education religious and specialty book publishers. Courier Corp. has a market cap of $186.4 million; its shares were traded at around $15.65 with a P/E ratio of 17.6 and P/S ratio of 0.7. The dividend yield of Courier Corp. stocks is 5.5%. Courier Corp. had an annual average earning growth of 15.9% over the past 10 years.
The Company evaluates possible impairment of goodwill and other intangibles at the reporting unit level, which is an operating segment or one level below an operating segment, 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, resulting from the continued downturn in the economic environment and in consumer spending, the Company performed an interim test of Dovers goodwill in the second quarter of fiscal 2009. As a result of the impairment test, the Company 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 the second quarter. On an after-tax basis, the impairment charge was $10.1 million, or $.86 per diluted share. In the third quarter of fiscal 2008, a pre-tax impairment charge of $23.9 million was recorded related to goodwill and other intangible assets of Creative Homeowner. On an after-tax basis, this impairment charge was $15.5 million, or $1.27 per diluted share.
Employee severance costs in the specialty publishing segment included centralizing back office and order fulfillment operations in addition to ceasing Creative Homeowners distribution services. Within the book manufacturing segment, the Company closed its Book-mart Press manufacturing facility during the second quarter in order to reduce redundant capacity and to lower costs and is consolidating its operations into the Companys other manufacturing facilities. The Book-mart Press facility, located in North Bergen, New Jersey, was dedicated to short-run, single-color production. The Book-mart Press facility had 72 employees and sales of approximately $7 million annually. Also during the second quarter, a voluntary severance program was offered throughout the Company, which was followed by additional workforce reductions in the book manufacturing segment due primarily to reduced one- and two-color capacity utilization. Overall, total headcount has been reduced by approximately 12% during fiscal 2009. At June 27, 2009, approximately $235,000 of severance costs remained accrued and the Company anticipates that payments associated with employee terminations will be substantially completed by September 2009. Annual savings from the reduction in staffing are projected to be approximately $5 million in the book manufacturing segment and approximately $3 million in the specialty publishing segment.
In connection with the closing and consolidation of the Book-mart Press facility, the Company wrote down the carrying value of assets that will not be utilized at other locations and for which the carrying value exceeded the fair value. Where applicable, the fair value of such assets was determined by estimating the proceeds that would be received based on the market value of similar assets. Lease termination and other Book-mart Press facility closure costs accrued at June 27, 2009 were approximately $420,000. Payments related to the lease obligation are scheduled to continue until July 2010. The Company anticipates additional expenses of approximately $300,000 related to consolidating and moving equipment from the Book-mart Press facility to the Companys other manufacturing facilities over the next six months.
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Courier Corporation is focused on streamlining and enhancing the process by which printed books and digital content reach end-user markets. They have three business segments: book manufacturing customized education andspecialized book publishing. Courier is a book manufacturer offeringservices from prepress and production through storage and distribution. Products include Bibles educational and consumer books and technical documentation primarily for education religious and specialty book publishers. Courier Corp. has a market cap of $186.4 million; its shares were traded at around $15.65 with a P/E ratio of 17.6 and P/S ratio of 0.7. The dividend yield of Courier Corp. stocks is 5.5%. Courier Corp. had an annual average earning growth of 15.9% over the past 10 years.
Highlight of Business Operations:
Revenues in the third quarter and first nine months of fiscal 2009 decreased in both of the Companys segments compared to the same periods last year. Book manufacturing segment revenues in the third quarter of fiscal 2009 were down 17% from the same period last year. On a year-to-date basis, sales in this segment were down 8% compared to the corresponding period last year, with growth in sales of four-color books offset by reduced demand for one- and two-color books. In the specialty publishing segment, revenues were down 15% in the third quarter and down 23% in the first nine months of fiscal 2009, compared to the same periods last year, primarily due to the weak economy and reduced consumer spending. The winding down of Creative Homeowners book distribution services early in the second quarter also contributed to the segments sales decline compared to prior year periods. The Company recorded net income in the third-quarter of $1.6 million, or $.14 per diluted share, and a net loss of $8.9 million, or $.75 per diluted share, for the first nine months of the year. These results include restructuring costs related to cost saving initiatives in both of the Companys segments of $3.8 million year to date. In addition, the Company recorded a pre-tax impairment charge of $15.6 million at the end of the second quarter related to Dovers goodwill. For the first nine months of fiscal 2009, these restructuring and impairment charges totaled $19.4 million, or $1.05 per diluted share. The third quarter of fiscal 2008 included a pre-tax impairment charge related to Creative Homeowners goodwill and other intangibles of $23.9 million or $1.27 per diluted share.The Company evaluates possible impairment of goodwill and other intangibles at the reporting unit level, which is an operating segment or one level below an operating segment, 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, resulting from the continued downturn in the economic environment and in consumer spending, the Company performed an interim test of Dovers goodwill in the second quarter of fiscal 2009. As a result of the impairment test, the Company 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 the second quarter. On an after-tax basis, the impairment charge was $10.1 million, or $.86 per diluted share. In the third quarter of fiscal 2008, a pre-tax impairment charge of $23.9 million was recorded related to goodwill and other intangible assets of Creative Homeowner. On an after-tax basis, this impairment charge was $15.5 million, or $1.27 per diluted share.
Employee severance costs in the specialty publishing segment included centralizing back office and order fulfillment operations in addition to ceasing Creative Homeowners distribution services. Within the book manufacturing segment, the Company closed its Book-mart Press manufacturing facility during the second quarter in order to reduce redundant capacity and to lower costs and is consolidating its operations into the Companys other manufacturing facilities. The Book-mart Press facility, located in North Bergen, New Jersey, was dedicated to short-run, single-color production. The Book-mart Press facility had 72 employees and sales of approximately $7 million annually. Also during the second quarter, a voluntary severance program was offered throughout the Company, which was followed by additional workforce reductions in the book manufacturing segment due primarily to reduced one- and two-color capacity utilization. Overall, total headcount has been reduced by approximately 12% during fiscal 2009. At June 27, 2009, approximately $235,000 of severance costs remained accrued and the Company anticipates that payments associated with employee terminations will be substantially completed by September 2009. Annual savings from the reduction in staffing are projected to be approximately $5 million in the book manufacturing segment and approximately $3 million in the specialty publishing segment.
In connection with the closing and consolidation of the Book-mart Press facility, the Company wrote down the carrying value of assets that will not be utilized at other locations and for which the carrying value exceeded the fair value. Where applicable, the fair value of such assets was determined by estimating the proceeds that would be received based on the market value of similar assets. Lease termination and other Book-mart Press facility closure costs accrued at June 27, 2009 were approximately $420,000. Payments related to the lease obligation are scheduled to continue until July 2010. The Company anticipates additional expenses of approximately $300,000 related to consolidating and moving equipment from the Book-mart Press facility to the Companys other manufacturing facilities over the next six months.
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