A decline in school and library sales that Millbrook Press first began to see in the quarter ended October 31, 2001, accelerated in the second period and, as a result, total revenues in the quarter ended January 31 fell 19.6%, to $4.3 million. The company reported a net loss in the quarter of $257,000, compared to a net income of $107,000 in last year's second quarter.
For the first six months of fiscal 2002, revenues fell 8.8% to $9.7 million, as sales to schools and libraries fell $1.1 million, offsetting a slight gain in sales to the consumer market. The net loss for the first half of the year was $108,000, compared to a net income of $437,000 in the first six months of fiscal 2001. Millbrook attributed the decline in library sales to disruptions in its New York City telemarketing department caused by the September 11 terrorist attacks and the tightening of library budgets due to lower state funding. Millbrook said it expects funding to remain soft for the rest of fiscal 2002.
To restore profitability on lower sales volume, Millbrook is decreasing its investment in projects "that don't meet our internal margin guidelines," said the company's chief financial officer David Allen. The company is also hoping for a boost from its new children's picture book line, Roaring Brook Press, which shipped its first titles in January. Allen said the line has been well received by reviewers and initial orders have been strong. Millbrook chairman Howard Graham said he expects Roaring Brook to "meet or exceed its goals."