Despite a second consecutive quarter in which results did not quite hit expectations, executives at Courier Corp. said they still believe the company will meet its sales and earnings goals for the fiscal year ending September 30, 2004. The basis for Courier's optimism stems from steady improvement throughout the second quarter that culminated in a rush of orders in March. "At the end of the quarter we were booking press time at the healthiest clip in more than two years," said Jim Conway, Courier chairman.
Total sales for the second quarter ended March 27 rose 2.2%, to $49.7 million, and net income was flat at $3.8 million. Sales in the book manufacturing segment dipped 0.3%, to $41 million, while sales in its publishing division increased 11%, to $10.1 million.
In the manufacturing segment, new elhi publishing customers helped Courier boost education sales by 14%, while an increase in Christian fiction was cited as the reason for a 2% increase in sales to the religion market. Sales to the specialty trade segment fell 20% in the quarter, which Courier attributed to slow sales of computer game books as well as soft reprint orders. Conway added, however, that the pace of reprint orders picked up toward the end of the quarter and he believes that publishers are feeling more confident about the economy than they have in several years. In addition to improving business trends, the installation of the company's new four-color press was another reason company executives believe that sales in the manufacturing segment will rise 3% to 5% in the year.
In its publishing segment, the gain in sales was due entirely to the addition of Research & Education Association, which Courier acquired at the end of December for $12 million. REA, which has annual sales of $6 million, contributed $1.1 million in revenue in the quarter. At Dover, sales to retailers fell 4%, due mainly to an 11% decline in business with the bookstore chains. Direct marketing sales rose 8% in the period, while international sales increased 13%. Courier expects Dover's sales to increase by double digits in the third and fourth quarters.
Conway said enough things "have been set in motion" for Courier to have a strong second half of fiscal 2004, and he said the company was looking for sales to increase 6% to 8% in the year, with earnings per share up 8% to 13%.