Declines in both its publishing and manufacturing segments led to a 5% drop in total sales, to $58.9 million, at Courier Corp. in the third quarter ended June 23. Net income was $1.6 million, including severance costs of $235,000 in conjunction with the consolidation of one-color printing operations, compared to a loss of $3.1 million in the third quarter of fiscal 2011, which included a pre-tax impairment charge of $8.6 million.

In the smaller publishing segment, third quarter revenue was $9.1 million, down 8% from last year’s third period, although the operating loss was cut to $975,000 from $1.2 million. For fiscal 2012 to date, publishing sales were $28.2 million, down from $30.8 million for the first nine months of last year. The segment’s operating loss through nine months was $3.9 million, even with fiscal 2011.

Only REA was profitable during the quarter, with sales up 2%, while sales at Dover fell 2%, although it cut operating loss by more than 20%, Courier said. Creative Homeowner, however, continued to bleed with sales down 31% and a loss of $227,000. Faced with a challenging publishing environment, “We continued to take out costs wherever we could without compromising our ability to deliver top-drawer content,” said Courier chairman Jim Conway.

Courier’s book manufacturing segment had third quarter sales of $52.4 million, down from $55.0 million for the same period last year. For fiscal 2012 to date, manufacturing sales were $163.9 million, up slightly from $163.6 million in fiscal 2011. The results for fiscal 2012 included restructuring costs for severance and post-retirement benefits, while last year’s second quarter results included plant closing costs. Excluding these restructuring costs, the segment’s third quarter operating income was $4.2 million, down from $5.1 million a year ago. For the first nine months of fiscal 2012, operating income was $11.7 million, up 4%, Courier reported.

Sales to the education market were down 12% in the quarter and down 3% for the year to date, with publishers managing inventories tightly and taking advantage of available capacity, Courier said. Sales to the religious market were down 3% from fiscal 2011 in the third quarter; through the first nine months religious sales were even with last year. Sales to the specialty trade market were up 1% in the quarter and up 6% for the year to date, reflecting increased orders at Courier Digital Solutions and a return to more traditional ordering patterns as the marketplace continues to assimilate the loss of Borders, the company reported.