A "significant" decrease in sales to the special trade markets and a slight decline in traditional trade sales offset gains to schools and libraries, resulting in a 13.9% decrease in total revenues, to $4.5 million, for Millbrook Press for the third quarter ended April 30. The net loss in the period was $172,000, compared to net income of $21,000 in last year's third quarter.
Millbrook attributed the loss in part to higher selling and marketing expenses associated with its Roaring Brook Press and Copper Beech imprints. Severance payments of $105,000, part of a 12% staff cut instituted by Millbrook in February, also hurt the bottom line in the period, although the company expects to see positive results from the initiative in upcoming quarters.
Millbrook chairman Howard Graham said results in the quarter were in line with expectations. He was particularly pleased with the performance of the school and library unit, which had a 6% increase after several down quarters due to cuts in school and library funding. The improvement in the school and library operations was due to Roaring Brook, which generates 40% to 45% of its revenues from institutions, as well as from a more stable funding environment. But because of weakness in the previous two quarters in the school and library market, total company revenues for the nine-month period were down 10.5%, to $14.3 million. The net loss in the period was $280,000, compared to income of $458,000 in the first nine months of fiscal 2001.
Millbrook will receive $550,000 in the fourth quarter as a result of its decision to discontinue publishing the Snappy book line produced by U.K. publisher Templar. Templar will repurchase all Snappy inventory and Millbrook will use the funds to invest in Roaring Brook, whose sales have exceeded expectations.